CUT IN VAT COULD CREATE 2,000 JOBS

DUP backs call for lower tourism trade rate in bid to match Republic

MORE than 2,000 jobs could be created if the VAT on hotels and visitor attractions in Northern Ireland is cut to 5%, a report claimed yesterday.

Hospitality pays 20% – more than twice that of competitors in the Republic where they pay 9%.

EU law prevents member states from setting different levels for different regions but that power will be repatriated after Brexit – and the DUP is pressing for a speedy cut.

Howard Hastings, boss of Hastings Hotels, said: “VAT is structural and would kick-start our tourism economy and these numbers understate the potential for delivery of more accommodation into Northern Ireland and the delivery of upstream benefits.”

The study, carried out by Nevin Associates, is the first to look at Northern Ireland separately from the rest of the UK. A cut in VAT for tourism would reduce Treasury income by £4.2 million in the first year. But figures suggest over a fiveyear period the Exchequer would gain £32million, rising to £109million over a decade. Ciaran O’neill, president of the Northern Ireland Hotels Federation and who runs Derry’s Bishops Gate Hotel, said room rates at hotels in Donegal had risen faster than in his city.

Mr O’neill added: “Because hotels in Donegal have a better margin they are able to price in a way that we cannot compete with.”

The study also shows in the Republic average spend per visit – £350 – is almost double that of Northern Ireland.

DUP MP Nigel Dodds said: “A cut in VAT in the tourism sector would attract more visitors, create more jobs and be a massive boost to the economy.

“This is a win-win – a win for the Treasury and a win for Northern Ireland and win for people’s employment.”

THE taxpayer is expected to take a £30million hit from investment in small business in Northern Ireland, the Audit Office said yesterday. However, private backers who signed up for the same venture capital and loan funds could achieve returns of up to...