Hospitality boss calls for cut to ‘ridiculously high VAT rate’

More than 2,000 jobs would be created in Northern Ireland’s hospitality sector if the VAT rate were cut from 20% to 5% on accommodation and visitor attractions, a study claims.

The report, carried out by Nevin Associates, is the first to look at Northern Ireland statistics separately from the rest of the UK.

It shows a VAT cut rate would boost Northern Ireland’s hospitality and tourism industry, which faces competition from the Republic, where a VAT rate of 9% applies on tourism accommodation, food and visitor attractions.

The study estimates that a cut in the VAT rate for visitor accommodation and attractions would result in a loss of Treasury income of £4.2 million in the first year.

However, over a five-year period, the Treasury would gain by £32 million, and by £109 million over a 10-year period.

Colin Neill, Hospitality Ulster chief executive, said: “It is time our ridiculously high VAT rate was reduced in line with many other countries, including the Republic of Ireland.”

Vernon Hunte, campaign manager for the industry body Campaign to Cut Tourism VAT, added: “There are clear benefits of [cutting VAT] in Northern Ireland – for the industry, the wider economy and the public finances.

“The campaign and our supporters will continue to campaign to ensure the opportunity is taken to allow our industry to compete on a fair playing field with the 33 other European countries who already enjoy reduced tourism VAT.”