Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment her Department has made of the potential impact of the standard 20% VAT rate on the international competitiveness of the (a) tourism and (b) hospitality sectors.

The Government recognises the significant contribution made by hospitality and tourism businesses to economic growth and social life in the UK.

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s VAT rate of 20 per cent is close to the OECD average of 19.3 per cent. The UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD, at £90,000. This keeps the majority of businesses out of the VAT regime altogether.