Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions she has had with representatives of the hospitality sector on comparative levels of VAT on accommodation and tourism in the UK and European destinations.

The Government engages with representatives from the hospitality and tourism sectors on a range of issues including taxation.

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s standard VAT rate of 20 per cent is close to the OECD average of 19.3 per cent.

The Government is aware that some European countries apply reduced VAT rates to hospitality, reflecting different tax systems, policy choices and wider fiscal contexts. Reduced rates of VAT come at a significant cost to the Exchequer, reduce the revenue available for vital public services, and must represent value for money for the taxpayer.