Autumn Statement 2014: Treasury rules out cut to tourism VAT

Kate McCann
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The Cut Tourism VAT campaign argues that the cut would help businesses around the country to grow (Source: Getty)
The Treasury has ruled out a cut to tourism VAT in the Autumn Statement next week, despite a campaign to slash the rate paid by tourist attractions and hotels around the UK.

The Cut Tourism VAT campaign, backed by Merlin Entertainments, the British Hospitality Association and a number of MPs from all parties, has called on the chancellor to reduce the rate paid by attractions to five per cent. The group argues that the cut would help businesses around the country to grow, and employers would pass on the benefits by boosting staff numbers and increasing pay.

However, a Treasury spokesperson poured cold water on the idea yesterday, telling City A.M.: “Although we keep all taxes under review, we do not have any plans to introduce a VAT cut for the tourism sector.

“The government recognises the importance of the tourism and hospitality industry. The UK also has the highest VAT registration threshold in the EU and many tourist attractions do not have to charge any VAT to their customers.” The UK’s current VAT threshold is £81,000. In Portugal it is €12,500 (£9,927).

The news will come as a blow to the industry, which claims it has suffered heavily as a result of the 2008 recession. The chancellor will announce his full economic policy for the year ahead next Wednesday, where the focus is expected to be on infrastructure projects.

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