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VAT: Hotels

Treasury written question – answered on 8th November 2011.

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Photo of Dan Jarvis Dan Jarvis Shadow Minister (Culture, Media and Sport)

To ask the Chancellor of the Exchequer what representations his Department has received on reducing the rate of VAT for hotels in the run-up to the London 2012 Olympics.

Photo of David Gauke David Gauke The Exchequer Secretary

holding answer 31 October 2011

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%.

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