Chartered Accountants Ireland calls for lower rate of VAT on tourism in NI

Jun 14, 2018
Chartered Accountants Ireland, which represents over 4,500 business professionals in Northern Ireland, has responded to the Government’s call for evidence on the impact of VAT and Air Passenger Duty on the Northern Ireland (NI) tourism industry.

The call for evidence, which was issued as part of the Chancellor’s Spring Statement, seeks to understand the ways that these taxes impact the tourism industry, and how the industry can be supported to build on its growing success.

Niall Harkin, Chair of Chartered Accountants Ulster Society commented: “Dragons, breath-taking scenery and the Titanic all feature in the rich tapestry of the tourism industry in NI and all have helped tourism in the region perform strongly in recent years. However Northern Ireland is at a competitive disadvantage when its nearest neighbour, the Republic of Ireland, charges 9% VAT on tourism activity, a staggering 11% less than the 20% rate charged in NI.

“As an all-island body, Chartered Accountants Ireland has direct first-hand experience of the impact of a reduced rate of VAT in stimulating tourism in the Republic of Ireland. A 9% rate of VAT would be a tremendous boost for the Northern Ireland tourism industry”.

The Chairman of Chartered Accountants Ireland’s NI Tax Committee, Alan Gourley said: “As recognised in the call for evidence, it will be important to consider the potential fiscal cost of lowering the VAT rate on tourism in NI. Useful precedent for this already exists in the form of the exercise undertaken when corporation tax devolution was being considered.”

“Any assessment of the potential fiscal cost in this context should be under the ‘net’ cost approach and should reflect the positive dynamic impact on VAT receipts as a result of additional taxes etc. which would flow from extra investment and jobs in the industry.”