A group of SNP MPs have written to the Chancellor George Osborne calling for a review of the rate of VAT on tourism.
The MPs have asked for new research to be commissioned by the Treasury to look at how reducing the current rate would act as an encouragement to help grow one of Scotland’s most important industries.
In the letter the MPs point out that in the last five years the tourism and hospitality industry in Scotland has reached a point where it now accounts for about 7% of total employment – and that there are concerns that the high rate of VAT is holding back potential for growth.
Angus MacNeil MP, the lead signatory to the letter said :
”The Treasury must revisit the issue of VAT as it relates to tourism. High rates of VAT are a serious challenge to the industry and we know that in countries where it has been reduced – there is clear evidence that tourism and the wider hospitality business thrives. Tourism in the UK is consistently held back by our uncompetitive tax environment.
” What the letter and our calls hope to achieve is that the UK Government will work with the tourism industry on how best to address our lack of competitiveness – and look at the evidence about how reducing VAT acts as a spur.”