Northern Ireland tourism opens consultation taxes

Wednesday, March 14, 2018

The Chancellor of Northern Ireland has launched the consultation taxations as promised by British Government as part of its Westminster deal with the DUP.

The Treasury’s “call for evidence” seeks views on the future of Air Passenger Duty and tourism VAT.

APD requires that the passengers on short haul flights flying in or out of Northern Ireland to pay around £13. The critics of the duty claim that it is causing a reduction in the number of flights in Northern Ireland, with passengers instead opting to use Dublin airport, where a similar duty was axed in 2014.

Many in the hospitality sector have also been campaigning for a reduction in the 20% VAT rate on the tourism sector, claiming it also puts the region at a competitive disadvantage with the Republic of Ireland, where the rate is 9%.

The opponents of the tax cuts argue the resultant cuts to the Northern Ireland’s block grant, to offset the shortfalls, would have a disproportionate impact on local public services.

The consultation states that the government wants to support the economy in Northern Ireland, and to help build on the growing success of the tourism industry there. The concerns have been raised about the impact of VAT and APD on tourism in the UK, and particularly in Northern Ireland.

The government of Northern Ireland is therefore seeking evidence that demonstrates the significance of any impacts that VAT and/or APD have on tourism, or that helps show how VAT and/or APD might be used to support the growing success of the sector in Northern Ireland. The consultation ends in June, with any resultant recommendations set to be factored in to Treasury thinking ahead of this autumn’s Budget. DUP MP Sammy Wilson welcomed the consultation which he said represented “further delivery on the confidence and supply agreement”.

Belfast International Airport said it will set out “the strongest possible case” for the removal of Air Passenger Duty in its formal submission to the consultation. The Airport Managing Director Graham Keddie said airlines have said they would “invest massively in Northern Ireland” if APD was removed.

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