The Issue: EU regulations stipulate a minimum 15% rate of VAT across all member states – however they allow an exception for tourism which can be reduced to 5%. The UK is almost unique in that it does not take advantage of this flexibility, meaning major tourist attractions, that work internationally, are not competing on a level playing field. BALPPA has long supported the Cut Tourism VAT campaign, which aims to persuade the Government of the merits of reducing tourism VAT.
The campaign is continuing apace and there have been a number of notable success. Firstly when meeting with the treasury the VAT Campaign demonstrated, with the Government’s own model, that a reduction in VAT would, in fact, generate revenues for the treasury in the long term.
When the campaign recently met with an adviser to the Prime Minister, he commented that a VAT reduction was ‘in the mix’. We continue to engage with the issue, which is very important to the industry.