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.
Stirling MP and signatory to the letter, Steven Paterson said:
“The Treasury must revisit this issue and assess how VAT relates to the tourism industry. 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.
“The Stirling constituency is lucky to have the diversity of rural and urban areas that can boast a breathtaking landscape as well as historical heritage – all of which contribute to the strong tourism-related industry we have today. However, opportunities for growth and investment are held back by an uncompetitive tax environment.
“The SNP Westminster Group’s letter calls for the UK Government to support the tourism industry and address our lack of competitiveness, looking at the evidence about how reducing VAT acts as a spur.”