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

- Dec 05, 2012 12:25 am

Skift Take

The UK companies want their taxes to be on par with Italy and Spain, but will have a tough time convincing Parliament to make any decisions that might lead to a fate similar to those of the bankrupt governments.

— Samantha Shankman

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.