Business

Chancellor launches consultation on north's tourism taxes

A consultation has been launched in relation to the future of Air Passenger Duty (APD) and tourism VAT in the UK
Gareth McKeown and PA

A CONSULTATION on Northern Ireland tourism taxes promised by the Government as part of its Westminster deal with the DUP has been launched by the British Chancellor.

As part of Philip Hammond's Spring Statement, the Treasury's "call for evidence" seeks views on the future of Air Passenger Duty (APD) and tourism VAT, two long-standing grievances for those within both industries in the north.

APD requires passengers on short haul flights flying in or out of Northern Ireland to pay around £13 and critics have said the tax is causing a reduction in the number of flights in Northern Ireland, with passengers instead opting to use Dublin airport, where a similar duty was axed in 2014.

Many in the hospitality sector have also been campaigning for a reduction in the 20 per cent VAT rate on the tourism sector, claiming it puts the region at a competitive disadvantage with the Republic, where the rate is 9 per cent.

Within the consultation document it states: "Concerns have been raised about the impact of VAT and APD on tourism in the UK, and particularly in Northern Ireland.

However, views on the potential costs and benefits of any changes are divided. The Government is therefore seeking evidence that demonstrates the significance of any impacts that VAT and/or APD have on tourism, or that helps show how VAT and/or APD might be used to support the growing success of the sector in Northern Ireland."

The consultation ends in June, with any resultant recommendations set to be factored in to Treasury thinking ahead of this autumn's Budget.

Hospitality Ulster chief executive Colin Neill welcomed the launch of the consultation process.

"Again we urge the government to make the right decision for Northern Ireland in order to help support our tourism sector and the wider economy. The hospitality sector is working for Northern Ireland, it would work even better if these taxes were abolished.''

In response to the consultation Belfast International Airport has said it will make the 'strongest possible case' for the removal of APD.

“Airlines have already told us that if the Government removed the burden of APD, they would invest massively in Northern Ireland with more based aircraft and a plethora of new mainland European destinations," managing director Graham Keddie said.

“The transformation for our entire tourism sector and its positive impact on the local economy would be immense, which is why we will be making the strongest possible case for the removal of this retrograde tax."

DUP MP Sammy Wilson added:

"This is a welcome step forward for the tourism industry in Northern Ireland."

"It also represents further delivery on the confidence and supply agreement. I have spoken with ministers to ensure that the process is concluded in time for any recommendations to be considered within the autumn budget."

In his Spring Statement the Chancellor revealed that the Office for Budget Responsibility now expects state borrowing to be £45.2 billion this year - some £4.7 billion lower than predicted in November and £108 billion lower than in 2010.

Debt is also forecast to be 1 per cent lower than expected at the time of last autumn's Budget, while he further hinted at the possibility that austerity will be eased in this autumn's budget.

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