CLA calls for VAT cut for tourism operators

24 October 2013

The CLA has called on the Government to cut VAT on the supply of rural tourism services from 20 percent to seven percent in a key report launched in English Tourism Week.

The Association has published Wish You Were Here? CLA policy on rural tourism, which recommends a reduction in VAT rates for people who provide accommodation and other services for tourists and argues against the "bed tax", a levy on visitors for every night they sleep in tourism accommodation that would make business uncompetitive.

CLA President Harry Cotterell said: "Tourism is a major source of diversification for farmers as well as being the primary business for many who live in the countryside. It is essential that tourism raises its game in terms of quality and scale.

"The CLA is calling on the Government to reduce the rate of VAT to seven percent to bring Britain into line with the rest of the EU. The increase in VAT from 17.5 percent to 20 percent – the highest in Europe – has severely restricted the economic viability of rural tourism businesses and disadvantaged Britain when compared to our European competitors."

He added: "The prohibitively high rate of VAT makes tourism overly expensive for many prospective visitors. It also discourages farmers from diversifying into rural tourism because it makes sense for them to be VAT registered for their farming activities but not for working as relatively small-time tourism providers."

Mr Cotterell said the CLA is lobbying against the introduction of a bed tax in England and Wales. He said: "A local authority-imposed bed tax may increase revenue in the short term but could also do long-term damage to the rural tourism industry."  

Read Wish You Were Here? CLA policy on rural tourism