Ireland reduced its VAT rate in 2011 to 9% on tourism related services and in the following five years is reported to have stimulated 30,000 new jobs. The Irish government took a lead and it clearly worked.
In the UK the Campaign to Cut Tourism VAT has been loud and clear, but the UK government has yet to act, if indeed it will. With the impact from the somewhat confused Brexit position on the rights on non- UK workers still unclear, cutting the VAT rate on tourism related businesses would seem to offer some solace for our industry.
Dermot King, MD of Butlin’s and Chairman of the Campaign to Cut Tourism VAT which launched research into the benefits of a Tourism VAT reduction for Northern Ireland in September, commented:
“Reducing Tourism VAT in Ireland has been shown to be a huge success, with the sector thriving and employment up. The UK should follow the example of Ireland which has reduced Tourism VAT twice and reaped the benefits.
The UK government is undertaking a consultative report into the impact of VAT on Tourism in Northern Ireland. Independent research carried out for the Campaign to Cut Tourism VAT into the benefits of a reduction in Tourism VAT from 20% to 5% in Northern Ireland could bring in £109m for the Treasury over 10 years, create well over 2,500 jobs. A UK-wide reduction would create 121,000 jobs and bring in £4.6bn for the Treasury.”
The people and skills shortages across every sector of our industry and every region needs addressing. It cannot be fixed quickly and it cannot be fixed easily. It will take many years to set any sort of robust strategy in place demanding a cohesive approach from all.
The Irish governments tried and tested successful strategy would seem simple enough to follow, even if only tested for a few years.