Weir calls for tourism VAT reduction

Mike Weir has asked the UK government once to consider VAT reduction on tourism related business to boost the rural economy in Angus .

Mr Weir, who is MP for Angus, has previously raised this issue, asked the Scottish Secretary to press the matter with the Treasury, and look to the example set in Ireland.

Mr Weir commented: “It is open to the UK government to have a lower rate of VAT on tourism-related businesses as, for example, has been done for hotel accommodation in 24 of the other member states of the EU, including Germany and France.

“Ireland has gone further and introduced a nine per cent rate on all tourist-related businesses and services as opposed to the standard rate of 23 per cent. A recent report has shown that this has given a significant boost of around 40 million euros to the economy and created 10,000 jobs.

“Tourism and related industries form an important element in the economy of rural areas such as Angus and a similar move could give a valuable boost to the local economy. A rise in visitor numbers could also result in a boost for other local businesses in our towns.

“It is not cheap to holiday in Scotland and the standard rate of VAT puts many businesses at a significant disadvantage when competing with lower rates in other parts of Europe.

“Everyone is having to look at their spending at present, and a reduction in VAT could produce significant savings to the individual, encouraging them to spend money in Scotland rather than overseas while, at the same time, giving a boost to the Treasury as has happened in Ireland.

“We need to encourage small businesses in rural areas to grow to create both jobs and income and this move could do so.”

Mr Weir added that he was disappointed, although not surprised, by the Secretary of state’s dismissal of the idea.

He explained: “Sadly despite acknowledging that this was an issue consistently raised by representatives of tourism businesses and organisations he was not prepared to take any positive action.”