All EU member states except for Denmark, Bulgaria and Romania currently apply reduced rates of tax for tourism services. Reduced rate VAT accounts for one third of the entire European tax revenue. The British Association of Leisure Parks, Piers and Attractions (BALPPA), which represents Britain’s seaside towns, as well as iconic attractions like the London Eye, Blackpool Pleasure Beach, Madame Tussauds and Alton Towers, will table a report to the Treasury to mark British Tourism Week (10th-18th March), which calls for a cut in VAT to boost tourism’s earning power and release millions towards the capital investment needed to take on foreign competitors. The paper shows that a cut to the standard 5% UK reduced VAT rate on tourist attractions admission and accommodation will boost employment and result in gains of up to £760 million savings in social security payments, increased income and corporation tax. It also predicts an additional £440 million will be injected into the industry supply chain. Reducing VAT on tourism services played a key role in Ireland’s economic revival. Foreign exchange receipts have increased by €170 million since Ireland reduced VAT in 1986. Colin Dawson, Chief Executive of BALPPA, said: “Tourism is a price sensitive industry and price is a key consideration people make when choosing a weekend break, holiday or even whether or not to take the kids to London or York for the day. Currently it is often cheaper to visit France or Spain than it is to spend time and money within these shores.”

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