Accountant and business adviser PKF has become the latest industry voice to call on the Government to reduce VAT for the UK’s hospitality and tourism trade next year.
Richard Wild, PKF’s director of VAT, warned that when the rate reverts to 17.5% in January it could mean that UK hotels will be paying three times more VAT than in many other European countries.
He called for the re-tabling of an Early Day Motion (EDM) urging the Government to consider reducing the VAT rate on accommodation and attractions in the UK.
Wild said: “We have one of the highest VAT rates in Europe in respect of tourism yet, whilst other countries are considering and implementing reductions in the rate of VAT in this area, the UK’s VAT rate is set to increase.”
The UK already has a lower rate of VAT, at 5%, to reduce the tax burden in specific areas and that could be extended to include tourism, giving the industry a much-needed boost, he added.
In Germany, from the beginning of 2010, the VAT rate for hotels will drop from 19% to 7%, while France has long enjoyed a reduced rate of VAT on visitor attractions of 5.5%.
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By Emily Manson
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