David McIlveen MLA, Chair of the All Party Group on Tourism and Assembly Private Secretary to Finance Minister Simon Hamilton, has this week offered his support to a VAT reduction for tourist accommodation in Northern Ireland. Mr McIlveen, who has been working closely with the tourism sector, has confirmed his party’s support for a VAT reduction in this vital part of the Northern Ireland economy. Whilst Northern Ireland has made significant progress in the tourism sector in recent years, the undeniable fact remains that Northern Ireland has the lowest contribution from tourism to GDP in the whole of the British Isles.
Mr McIlveen and his party are firmly of the belief that a VAT reduction would be a real economic driver and continue to make representations to the Treasury on this matter. The case for a reduction however is not like that of corporation tax as it is against European Law for differing VAT levels to exist within the same state, therefore any reduction in VAT would have to be across the whole of the United Kingdom and not just for Northern Ireland.
Speaking this week Mr McIlveen said:
‘In September 2012, in my first Assembly term, myself and DUP colleagues Simon Hamilton and Gregory Campbell raised this issue and received Assembly support. Since then, the First and Deputy First Ministers and the Finance Minister have been pursuing the case with Her Majesty’s Treasury, in an effort to obtain the maximum possible reduction in VAT. Having recently taken up the new post as Minister for Finance and Personel Mr Hamilton is as convinced as ever that a reduction in VAT particularly on hotel rooms would do a lot to drive our tourism sector even more, so there can be no doubt that we will continue to press the case with Treasury.
As Chair of the All Party Group on Tourism, I am fortunate to work closely with many of those within the tourism sector. I recently hosted the launch of the Northern Ireland Hotel Federation report, Tourism 2020: Investing in Our Future. In that, the Federation sets out the 5 Ts, that Northern Ireland needs to promote its tourism sector. They are tourism, targets, trading, training and of course, tax.
One of the most telling parts of the report stated that we have the third highest VAT rate in Europe at 20% and are one of only four countries in the 28 member EU that does not have a reduced rate for accommodation. This barrier to growth is causing considerable problems to our hoteliers in this part of the United Kingdom and I hope we can continue to work to remove this particular barrier.’