Ulster Unionist MP Robin Swann and UUP Economy Spokesperson Diana Armstrong MLA have written to the Chancellor of the Exchequer, Rachel Reeves MP, urging consideration and commitment to parity of hospitality VAT in Northern Ireland and the Republic of Ireland.
This follows the recent announcement that the Irish Government intends to lower VAT from the current 13.5% to 9% on hospitality in the Republic, further widening the gap with Northern Ireland.
Northern Ireland’s current rate, like elsewhere in the UK, is 20%.
This is resulting in restaurants and hotels in Northern Ireland struggling to compete with their counterparts in the Republic, and customers having to pay more.
Earlier in the week, the Ulster Unionist Party put a call for Hospitality VAT Harmonisation to the Northern Ireland Assembly and the motion was passed unanimously, showing the widespread support for this reduction across the parties.
In their letter to the Chancellor, Mr Swann and Ms Armstrong said:
“The hospitality and tourism sector is a vital component in the outward facing image of Northern Ireland and it is pivotal in demonstrating all that is good about our country, the stunning landscapes, the warm welcomes, storytelling, food, music and culture.
“This industry, however, is facing a challenging economic landscape made worse by Government driven tax rises and policies such as the Employer National Insurance Contributions and 20% flat rate of VAT on leisure and hospitality.”
The Ulster Unionists highlighted that the UK has the second highest hospitality VAT rate in Europe, and added:
“The planned reduction in the Republic of Ireland of hospitality VAT from 13.5% to 9% will mean a substantial differential of 11% on rates just across the border on hospitality, and this will be a huge threat to the confidence of operators in the hospitality and tourism industry in Northern Ireland.
“This disparity will undoubtedly lead to an undercutting of our hospitality sector, making it increasingly difficult for businesses in Northern Ireland to compete.
“To create a level playing field and ensure the survival and prosperity of our hospitality and tourism sector, we urge you to consider and commit to lowering the VAT rate for leisure and hospitality in Northern Ireland to match the Republic of Ireland.
“This adjustment would not only help mitigate the competitive disadvantage posed by the Republic of Ireland's VAT reduction but also provide much-needed support to an industry that is crucial to our economy and cultural identity.”
Seeking this commitment from the Treasury was also an Ulster Unionist Party general election pledge.