Debate contribution: VAT for Hospitality

Debate contribution by Ms Diane Forsythe on 13 May 2024.

MLA

Ms Diane Forsythe

Party at the time

Democratic Unionist Party

Date

13 May 2024

Type

Debate contribution

Business

Opposition Business

Heading

VAT for Hospitality

Assembly identifier

Official Report component 4489427

Read the official Assembly record

Text

The DUP fully recognises the importance of the local hospitality sector, including its importance in realising Northern Ireland's tourism potential and boosting the high-street economy. Hospitality is the fourth-largest private sector employer, with some 57,000 jobs in accommodation and food services alone. My party is committed to ensuring that businesses and employers have the tools and the right support to thrive and grow in what are challenging economic times. In particular, we believe that cutting tourism and hospitality VAT is crucial going forward. We have said consistently that the difference in hospitality VAT between Northern Ireland and the Irish Republic, in particular, is an impediment to creating a more competitive environment locally and to building on the sector's standing as an engine for growth and job creation. That is especially a concern in constituencies that are near the border, like my constituency of South Down. Hospitality was one of the worst-affected sectors during COVID. DUP Ministers prioritised it as part of the Executive's economic recovery plan. Prior to the rate of VAT returning to 20% in March 2022 after the COVID response, the all-party parliamentary group for hospitality and tourism endorsed calls for a lower rate of VAT to be applicable across the United Kingdom. Following on from that and the group's recommendations, it is clearly not a question of whether we should act but how we should act to support that vital industry. In response, my party does not believe that the necessary capacity exists to devolve those additional fiscal powers at present. We do not support devolution of the additional fiscal powers for setting VAT here, but we recognise that the motion calls only for consideration of options to support the sector, which we do support. The motion does not state support for the devolution of VAT powers, so my party can support it. Our view is based on a number of pragmatic considerations. The Fiscal Commission's report highlighted the:

"uncertainty regarding the significant additional compliance and administration burdens"

associated with devolving VAT to the Executive and Assembly. The commission did not recommend that course of action. It also pointed to the fact that an agreement to assign a proportion of VAT revenues to Scotland has been beset by years of delay because information on how revenues break down between regions is simply not available. If that is the evidence for reforms that do not grapple with the issue of powers or rates, what hope is there that the wholesale devolution of VAT to Northern Ireland could take place in a timely way? My party questions whether devolving those powers would bring timely benefits for affected firms. There are other actions that Ministers could take collectively to ease pressures and promote a more resilient and competitive landscape for the hospitality and tourism sector. My colleagues will take forward further points.

472 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 10:28 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification