Tourism: VAT

(asked on 23rd March 2017) - View Source

Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what estimate his Department has made of the net fiscal effect of reducing VAT on accommodation and visitor attractions to five per cent taking into account of a potential increase in competitiveness and economic activity.


Answered by
 Portrait
Jane Ellison
This question was answered on 28th March 2017

The £10 billion annual cost of reducing VAT to five per cent on tourism covers accommodation, visitor attractions and restaurants. The cost of reducing VAT to five per cent on accommodation and visitor attractions alone is estimated at £3.1 billion annually.

The Government has carefully considered the evidence for applying a five per cent reduced rate of VAT on accommodation and visitor attractions and believes that the costs of doing so outweigh the benefits.

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