The government have published a call for evidence, ‘ VAT, Air Passenger Duty and Tourism in Northern Ireland’, which is seeking evidence on the impact of VAT and Air Passenger Duty (APD) on tourism in Northern Ireland.

Following concerns raised over the impact of VAT and APD on UK tourism, in particular Northern Ireland, the government are keen to understand how the tourism industry can be supported.

Notably, Ireland has reduced the VAT rate for certain tourism related activities on several occasions and the government is keen to understand how this has impacted Northern Ireland tourism or indeed, Southern Ireland tourism.

There is no suggestion in the call for evidence that VAT rates will definitely change to encourage Northern Ireland tourism, but it does appear that some form of VAT benefit will be considered.

The consultation closes on 5 June 2018 and the full document can be found here.

Summary of questions

Question 1: What evidence is there that demonstrates the impact of VAT and APD on the tourism sector?

Question 2: What evidence is there that cost is a significant factor to tourists considering visiting Northern Ireland?

What proportion of the cost of a holiday in Northern Ireland is made up of VAT and APD?

How much does the cost of a holiday in Northern Ireland differ from other parts of the UK, and from other parts of the Island of Ireland?

Question 3: Are there additional challenges, unique to the tourism industry in Northern Ireland, which might be addressed through VAT or APD changes?

Question 4: What impact do current VAT reliefs, exemptions and refunds have on the tourism industry in Northern Ireland? Are they a significant benefit?

Question 5: What impact do VAT and APD have on people considering visiting Northern Ireland for business purposes?

Question 6: What evidence is there that changes to the VAT rate applied to tourism in other countries has had a significant impact on the demand for tourism in those countries?

What evidence is there to suggest the reduced rate of VAT in Ireland has positively or negatively affected tourism in Northern Ireland?

What was the impact of the Northern Ireland Assembly’s 2012 decision to set a £0 APD rate on direct long-haul flights departing Northern Ireland?

Question 7: What is the composition of the tourism industry in Northern Ireland?

How have the individual tourism related sectors listed in 4.1 performed in recent years?

Question 8: Do VAT and APD impact different tourism related businesses in different ways? For example, do restaurants derive a greater benefit from the UK’s high registration threshold than accommodation providers?

Question 9: What evidence is there that the impacts of VAT and APD on tourism differ from the impacts of VAT and APD on other sectors of the economy?

Question 10: How would different VAT rules for tourism related activities in Northern Ireland, and/or a lower rate of APD in Northern Ireland affect the tourism industry in other parts of the UK?

What impact would VAT and/or APD changes have on businesses administrative burdens?

Question 11: Would a lower rate of APD encourage outbound tourism from Northern Ireland? What effect would this have on the tourism industry there?

Question 12: What would be the individual and/or collective impact of a change to VAT on: accommodation, leisure activities and restaurants, other tourism related activities and/or a change to APD rates in Northern Ireland on tax revenue and the wider economy?

Question 13: How would businesses in the tourism sector respond to VAT and APD changes and to what extent would those changes would be passed through to consumers in the form of lower prices?

Question 14: What evidence is there that VAT and/or APD rate changes are a relatively cost-effective means of supporting the tourism industry?

Question 15: How would a UK-wide change to VAT or APD benefit the tourism industry?

How would the industry in Northern Ireland benefit relative to other regions in the UK?