A VAT cut from 20% to 5% would enable canal holidays and other British destinations to compete with similar EU and American attractions claims some canal hirersand other holiday providers. It would initially hit Treasury revenue but economic forecasters say that it would cost nothing after five years and have a gain of £1.9 billion after ten years.
The United Kingdom is one of only four countries not to take advantage of an EU rule which allow governments to implement a reduced rate of VAT on tourism; which means that British families or foreign visitors pay twice or three times as much VAT as other European holidays.
An influential group from Britain’s holiday accommodation industry has launched the ‘Cut Tourism VAT’ campaign to lobby the Government for the rate of VAT on tourism to be brought into line with other competing destinations within the European Union.
It has major implications for the boating industry, particularly for the inland waterways holiday hire boat sector where it would no doubt increase bookings and probably expansion.
Managing director of ABC Leisure Group, Edward Helps, one of the biggest hire boat operators, said – “A reduction in VAT on tourism activities in Britain would enable companies such as ours to compete on a level playing field with holidays provided in other countries where tax benefits are already given to encourage this business. If the UK government backed this initiative it would make Staycations as well as inbound tourism a lot more competitive”.
Other marine industry companies are being urged to join the campaign. More information online here.
Thanks to Harry Arnold and Waterway Images for this report and image.