General Industry

Northern Ireland Calls for Reduced VAT Rate

By Steve Wynne-Jones
Northern Ireland Calls for Reduced VAT Rate

The Northern Irish hospitality sector is calling on the British government to reduce the VAT rate for the sector by as much as 15 per cent to boost tourism.

Colin Neill, chief executive of Hospitality Ulster says the representative body has been asking to reduce the rate, which is currently at 20 per cent, to as little as 5 per cent.

"Even if we got 9 per cent, it would be a level playing field and would make an incredible difference," said Neill, referring to the special 9 per cent VAT rate currently applied to hospitality businesses in the Republic.

According to the Irish Independent, the British government will examine the effect cutting the VAT rate would have on the sector. If introduced, it may have to apply across the UK, and not just in Northern Ireland.

Speaking to the Northern Ireland Assembly, Enterprise Minister Jonathan Bell said 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."

The special 9 per cent VAT rate was introduced in Ireland in 2011 and has been credited for creating over 30,000 jobs in the industry since. The IHF, RAI and Fáilte Ireland have all urged the government to retain the rate for the foreseeable future, to capitalise on the tourism industry's growth.