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BHA PUSHES VAT TO TOP OF THE AGENDA


Ufi Ibrahim, chief executive, British Hospitality Association, has recently put forward a strong argument that the high rate of UK VAT on this country’s hotels, restaurants and tourist attractions, compared with all but three of the 27 EU member states, makes the UK ‘hugely uncompetitive’ with the rest of Europe. She says, “If Britain’s tourist industry is to grow and develop, a continuing VAT rate of 20 per cent will act as a decisive break on that ambition.” As a result the BHA, is now actively campaigning to reduce it.


In 2011 British Curry Awards event, the founder Enam Ali MBE raised his concerns about the VAT rate in the hospitality sector and urged the government for a 5 per cent tax con- cession on the hospitality sector, like they have in France. In his opinion, this would help to boost the numbers of people dining out, promote growth, create more jobs and, in turn, bring more money fl owing into the exchequer. He said, “If anyone here tonight could take that message back to the Chancellor, George Osborne, I’d be grateful.”


The Guild of Bangladeshi restaurateurs also have been campaigning for a long time for the reduction of the VAT in the restaurant sector. Imam Uddin, President of Staffordshire region said: “20% is not helping our sector at all. We have seen a considerable drop in the frequency of our diners visiting the curry restaurants. If nothing is done, we will see many more restaurants closing down and unemployment rising in this industry.”


Last year the BHA commissioned an independent report by Tourism Respect on the impact of VAT on the restaurant sector. While the impact on HM Treasury receipts was not positive, the impact on restaurant jobs was highly signifi cant. Furthermore the experience in France, where over 50,000 were created when the French government reduced VAT on restaurant meals to 5.5 per cent, shows that is no mere forecast. Ms Ibrahim adds, “We have started negotiations with HM Treasury and we believe that our arguments are powerful and persuasive. But we need to exert even more pressure to encourage government to act.”


The aim of the BHA is to ensure that every MP in the coun- try understands the importance of hospitality and tourism to his or her local economy. “This is because we want MPs in turn, to put pressure on the government to respond to


our campaign so the more local businesses can highlight the uncompetitive nature of UK tourism to MPs, the more pressure will be able to put on government.”


Spice Business is supporting this campaign and would urge all restaurants to write to their MPd as soon as possible. “We need to get the message across to MPs that cutting VAT on restaurant meals will protect jobs, give local businesses a much needed boost and will also generate more revenue for the government,” says Enam Ali, editor.


A survey of over 200 members of the BHA shows that an overwhelming majority support the industry’s campaign to reduce VAT to fi ve per cent on hotel accommodation, attractions and for meals away-from-home. The survey marks the launch of new VAT pages on the BHA website, giving updated developments on the campaign as well as a comprehensive series of questions and answers which explain the background to the campaign and its aims and objectives. A Facebook campaign is also being launched.


The BHA’s survey reveals that members believe that the UK will gain a poor reputation for value for money if the government continues to keep VAT for the UK hospitality and attractions industry at 20 per cent and that this represents a severe barrier to growing their business. Nearly 98 per cent say that the current VAT rate hinders the competitiveness of the UK hospitality and attractions industry and 85 per cent forecast that a reduction to fi ve per cent would create new jobs and increase staff numbers.


Over 95 per cent say they would pass on all or some of the cut in VAT, if achieved, while 82 per cent will invest more in their facilities, 67 per cent will employ more people, 57 per cent will invest more in training; just under half (48 per cent) will increase staff wages.


Ms Ibrahim claims the research emphasises the benefi ts that will be brought about by a reduction in VAT for the hospitality industry. “Experience in other countries shows that major changes in VAT rates are passed through to customers in their entirety,” she says. “It’s clear that our members plan to plough the saving achieved back into their business


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