The Irish Government looks set to drop the rate of VAT for goods and services related to tourism to just 9%. This could happen by as early as July and is almost certain to apply to restaurants, hotels and catering companies.
Many other European countries have adopted a similar scheme, with French hotels and restaurants enjoying a rate of 5.5%, Belguim 12% and Germany 7%.
The move has re-opened the debate on whether or not there should be a similar rate in the UK for hospitality businesses:
http://www.caterersearch.com/Articles/2011/05/18/338311/Industry-calls-for-cuts-after-Ireland-drops-VAT-rate-for-tourism.htm
But assuming the Government agreed in principle to such a move, what should the rate be set at for UK hospitality businesses? What do you think we could reasonably get away with asking the Government for and why?
How long is a piece of string? Obviously I'd really like a rate of 0% but I know there is no way we would get that. I think it is important that we are roughly on a par with other major European countries like France and German if we want to stand any chance of competing for inbound tourist business. A rate for hotels of around 7% ought to be sufficient. It's a big drop but let's see how Ireland does out of 9%.
halving it might help
but not sure if it would help the government purse!
Calvin Hanks
www.cjgroup.co.uk
I would like a level playing field with France and Germany, so 5.5% would do me fine. I am led to believe the Government is not considering a reduction in the rate but would be delighted to be proved wrong.
Looking forward to the Irish Government decision as, if it comes about, it will put a useful pressure on the UK Government
Anthony Lloyd
Fallowfields Hotel and Restaurant, Oxfordshire
www.fallowfields.com