The UK hospitality industry gave a mixed reaction to yesterday’s Budget but attacked the Chancellor for not lowering VAT levels for hotels.
The British Hospitality Association accused Chancellor George Osborne of missing an opportunity to create more jobs by making the UK’s hospitality and tourism industry competitive with other European countries.
Deputy chief executive Martin Couchman said the BHA would continue to lobby for a reduction to 5% of VAT on hotel accommodation and attractions so that the industry could operate on an equal footing with European rivals.
Such as measure could create more jobs at a “critically important time,” the BHA said.
“The Chancellor said that he wanted Britain to have a tax system that is more competitive for business than any other major economy in the world, but Britain has the third highest VAT tax rate on hotel accommodation in Europe,” said Couchman.
“We are continuing to compete with countries like France and Germany which charge 7% on hotel accommodation, Spain which charges 8% and Italy which charges 10%. Of all the 27 EU member states only Denmark and Lithuania charge a higher rate.”
Lack of action on lowering VAT means that Britain’s fifth biggest industry will be unable to realise its full potential and create more jobs.
Couchman conceded that other Budget measures were helpful, including the reduction of Corporation Tax and the simplification of tax returns for micro-businesses such as guest houses and B&Bs.
“Altogether, if the Budget achieves the Chancellor’s aim to get Britain moving, then this is to be welcomed, but tourism and hospitality could make a much bigger contribution to this objective if he had listened to our arguments on the reduction of VAT,” he added.
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