Butlins have joined the Cut Tourism VAT campaign to have VAT reduced on tourism in the UK. Citing a move to cut VAT as a no brainer, Dermot King M.D. of Butlins is calling for a reduction of the current VAT rate on tourism from 20% to 5%.
Supporters claim that a reduction would lead to the generation of 120,000 jobs over ten years. They also claim that it would actually increase the size of the treasury’s coffers.
Ministers have however argued that the coffers would deplete, and that other sectors would also start demanding similar reductions. The recent reduction on bingo taxation will unfortunately not have paved the way for reductions in other sectors, as that move ran hand in hand with an increase in online gaming revenues. So, although the land based bingo industry was claiming that the reduction would increase jobs and tax revenues, in effect even without these positive effects on the economy the online gaming industry legislation and taxation changes would mean an increase into the treasury anyway.
Supporters have pointed out that EU law allows reduction of VAT for tourism, and that other member states have taken advantage of this and have reduced their tourism break. So, we are at a disadvantage when it comes to competition from holidays on the continent. Having said that the widely reported huge increase in staycations this year perhaps tells a different tale, i.e. that whilst being offered cheaper holidays on the continent many holidaymakers are still choosing the UK, and their numbers are increasing. This however may be a result of the past two marvellous summers that we have had, but if next summer does not follow suit, those figures may go into reverse.
It will be interesting to see how the campaign progresses, and whether or not representatives will get their case heard properly. If the campaign does go the way of the Boost Bingo Campaign get ready to see photos in the press of politicians emerging from caravans and making their way to holiday park restaurants for a spot of breakfast! One element that certainly helped the bingo taxation campaign was an element of supporting the working class worker, and Cut Tourism VAT may do well to look at how that campaign was orchestrated. Stay tuned, we’ll be following this one closely, because if successful, it may ensure that the staycation is actually here to stay. Original article
By: Gareth Whieldon
