NI targets reduced VAT rate for tourism sector
Published 21/03/2016 | 02:30
The British government is to examine how a VAT rate cut in Northern Ireland could help boost its hospitality and tourism sectors.
If such a cut was introduced, it would enable the tourism sector in Northern Ireland to pitch itself more competitively against the Republic.
The Irish government introduced a special 9pc VAT rate for the tourism and hospitality sector here in 2011.
It has been credited by the industry for creating over 30,000 jobs and helping the sector recover from the downturn.
The reduced VAT rate was reaffirmed in the last Budget.
There have been continued calls from the tourism and hospitality sectors in Northern Ireland to lower the VAT rate in line with the Republic.
Businesses in Northern Ireland and the rest of the United Kingdom are currently charged a 20pc VAT rate.
But Northern Ireland Enterprise Minister Jonathan Bell recently met the UK's acting Sports, Tourism and Heritage minister, David Evennett, to encourage the introduction of a reduced VAT rate in Northern Ireland for the tourism sector.
"The case was made that a reduction in tourism VAT had the potential to help support and grow our tourism economy further and improve the competitiveness of the industry as a whole," Mr Bell told the Northern Ireland Assembly.
But such a cut may have to be introduced across the UK, rather than only being applied to Northern Ireland.
"We have been pushing. We have asked for 5pc on accommodation, food and visitor attractions," said Colin Neill, chief executive of Hospitality Ulster.
"Even if we got 9pc, it would be a level playing field and would make an incredible difference," he added.