HMRC have published ‘VAT, Air Passenger Duty and Tourism in Northern Ireland: summary of responses’ and, whilst acknowledging the effect on tourism of these taxes, will take no action at this stage.

The Call for evidence took place following concerns raised over the impact of VAT Air Passenger Duty (APD) on Tourism in Northern Ireland, particularly given the lower rates experienced in Ireland. The call for evidence sought to understand the impact.

Respondents to the consultation:

  • Were in favour of cuts to the rate of VAT applied to accommodation and attractions in Northern Ireland.
  • Suggested cuts to VAT on food and beverage services as well.
  • Noted that there is a clear distortion of competition, as Ireland’s VAT rate is 9% on tourism related services, moving to 13.5% on 1 January 2019, whereas Northern Ireland’s is 20% in most cases.

The government have confirmed that no changes will be made for the time being but it will remain under review:

  • VAT and APD are important sources of revenue for the Exchequer.
  • Using different VAT rates on the same services in the same territory would likely lead to additional administrative burdens for taxpayers and businesses.
  • There is currently no scope for further devolution of any tax in Northern Ireland.
  • It is not possible to introduce differential standard VAT rates within a single VAT territory under EU law.


Impact of VAT on Northern Ireland tourism: call for evidence

External link

‘VAT, Air Passenger Duty and Tourism in Northern Ireland: summary of responses’