Overtaxed UK tourism companies launch campaign to cut VAT to 5 percent

A group representing nearly 400 hospitality businesses, largely in the hotel and leisure sector, have launched its official campaign to cut VAT on accommodation and attractions to just 5% in Parliament.

The latest report into the effects of a VAT cut…shows that a VAT cut to 5% on tourism services would:

• Create 78,000 jobs over 10 years
• Create a net present value fiscal return to the Exchequer over 10 years of £2.6b (2011 prices)
• Assuming VAT were to reduce in 2013, the first year would see a direct loss to the Exchequer in VAT revenue of £1.7b, but the notional loss would be lower at £232m, after the effect increased trade and employment were taken into effect.