The number of overseas visitors coming to the UK for a holiday has fallen from 33million in 2007 to 31million in 2012, costing the economy £1.1billion per annum. The UK is one of the only European countries that have kept the full standard VAT rate on hotel accommodation, restaurants, theatres and catering services. Countries such as Ireland, where their standard VAT rate is 23% have reduced their VAT rate for the sectors mentions above to 9% to try and keep their tourism market alive.
The head of VAT said “The UK’s 20% VAT rate on tourism leaves the industry challenged and probably with a further squeeze on their margins as tourists will resist price rises”
Personally, I think that the UK should really consider reducing the VAT rate, as it would probably increase the amount of visitors and bring more business into the UK. As most of the other countries surrounding the UK have a reduced rate such as Ireland, France, Germany and Italy, this could make them more attractive to people looking for a holiday from around or outside of Europe.
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