Britain’s withdrawal from the EU provides an ideal opportunity to review VAT for tourism business, according to British Hospitality Association chief executive Ufi Ibrahim.
Ibrahim reiterated the BHA’s position on VAT, which she described as the highest consumer tax in Europe, and called for a phased reduction for dining, accommodation and attractions.
She argued hospitality businesses were being hit by an accumulation of taxes and levies
Ibrahim also warned of a climate of increasingly toxic rhetoric following the referendum which could damage Britain’s tourism industry.
She said: “For us VAT on tourism must be competitive across all EU countries.
“According to all the research it would be more feasible from a numbers point of view for the government to take a phased approach to a reduced rate of VAT across the board in the UK
“We want to see a reduction across dinging out, accommodation and attractions, the majority of tourism service across the UK, which is compatible with EU law.
“And what a great opportunity since we are withdrawing from EU to review VAT, the highest consumer tax in Europe.”
Operators are facing a number of looming storm clouds, including the Apprenticeship Levy, rises to the National Minimum Wage and National Living Wage, changes to business rates and economic uncertainty around Brexit.
Tourism businesses have long called for a reduction to VAT, but despite cross party support, former chancellor George Osborne consistently rejected the proposal.
On the current climate, she added: “We have to very careful that our reputation as a welcoming hospitable nation is protected and that were open for business. At the moment some of the political rhetoric is very damaging to our reputation
“We call on the prime minster to send out very strong messages, that the individuals that are living here are contributing to our economic viability economy, and advise that we are a nation that is open for business.
“Particular since the value of sterling has fallen so dramatically, what better time to be sending the right messages rather than the wrong messages.”
