Scottish Conservative leadership candidate Murdo Fraser MSP has called for a cut in the rate of VAT for hospitality businesses, to assist the struggling sector.
Hospitality across Scotland is suffering significant challenges, due to a range of cost pressures. The failure of the SNP Government to pass on rates relief from the UK Government, rising energy and staff costs, the failed deposit return scheme, changes in licensing regulation, the introduction of LEZs, and the new tourist tax, are all having an impact on struggling hospitality businesses. This has seen a spate of closures in the sector which should be one of the mainstays of the Scottish economy.
The UK has one of the highest rates of VAT for hospitality in any part of Europe, and this has a disproportionate impact on Scotland, where tourism plays a relatively more important role in the economy.
Commenting, Murdo said: “Hospitality is a key component in the Scottish economy, and it is disproportionately more important to Scotland than the rest of the UK, given how significant tourism is as an employer.
“Scottish hospitality businesses have seen profits squeezed in recent years due to a range of measures, not least the refusal of the SNP Government to pass on the rates relief available from Westminster to businesses here. Now, with the introduction of the Tourist Tax, Scottish hospitality businesses look at becoming even more uncompetitive. We have already seen too many go to the wall, and this pattern is likely to be repeated unless action is taken to assist the sector.
“That is why I am calling today for a reduction in the VAT rate for hospitality from 20% to 10%, delivering a real boost to a sector of the economy in much need of support.
“The UK has one of the highest VAT rates for hospitality of any part of Europe, and we need to take action to address this if we are to remain a competitive destination and secure the viability of hospitality businesses. I will be asking all UK Conservative leadership contenders to pledge to a VAT cut for hospitality.
“Standing up for Scottish businesses is exactly what the Scottish Conservatives should be doing, and under my leadership we will be fighting their corner at every turn.”
