VAT on tourism businesses should be cut to 5%
to boost the economy post-COVID-19, says the Country Land and
Business Association (CLA).
The call comes as the business group, which
represents 30,000 rural businesses, releases a raft of new
suggestions to get the rural economy moving.
CLA President Mark Bridgeman
said:
“Rural tourism businesses will see revenues fall by
up to £17.6bn this year. It is right that, for the moment,
people stay away and follow government guidelines. When the
restrictions are lifted we are encouraging everyone to book their
family holiday in the beauty and safety of the British
landscape.
“We hope that people are looking forward to enjoying
the tranquility and space that the rural and coastal areas have
to offer and enjoy. There is nowhere better for a holiday than
the Great British countryside.
“In the UK VAT on tourism businesses, at 20%, is far
higher than in many other countries, including France (10%),
Spain (10%) and Greece (13%).”
“A reduction in VAT to levels seen in other countries
will ensure that domestic tourism is competitive and affordable.
Competitive pricing will significantly boost the economy and keep
our carbon footprint down.”
The CLA published its paper ‘COVID-19:
Re-starting the economy in rural areas’ this week
arguing that rural areas have an in-built advantage to implement
social distancing thanks to lower population density, more space
and less reliance on public transport.
Other measures should include:
The tapering of furloughing schemes and other
business support measures slowly to avoid a cliff
edge
Taking measures to create a more robust food supply
chain, including efforts to ensure consumers buy British and buy
local
Simplifying the planning system to encourage business
start-ups in the rural economy greater flexibility to the use of
buildings (e.g. converting into homes).
The rural economy is 16% less productive than the
national average, closing the gap could be worth an additional
£43bn to the national economy in England alone.
Mr Bridgeman added:
“Although the current situation is very difficult for
rural businesses there is also an opportunity to reflect and then
to build a better rural economy on a sounder competitive
basis. The rural economy has a huge amount to offer the
country – economically, socially and environmentally.
Government can show some real ambition in unleashing its
potential.”
