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I am aware of a number of trade campaigns to reduce the rate of VAT on the tourism and hospitality sectors, including the hotel sector. Generally, these advocate an immediate permanent cut in VAT because other EU member states have reduced rates of VAT for hospitality, and on the basis of some economic modelling. Therefore, they take no account of the significant benefit to the hotel industry of the holding the Olympics in London in 2012.
Businesses in the hotel sector also benefit from measures introduced under this Government. For example, the main rate of corporation tax has been cut from 28% to 26% and the small profits rate of corporation tax has been cut from 21% to 20%.