The Liberal Democrat MP tabled a written question at the House of Commons yesterday, asking Chancellor George Osborne if he would 'consider reducing the rate of VAT charged to hotels in the UK for the purposes of enabling them to run their businesses at similar levels of taxation to hotels in other EU countries'.
Farron said he was supporting the campaign because hotels and B&Bs in the Lake District were the 'backbone' of his local economy and needed more support from the Government.
"Recently I helped secure funding to help advertise the Lake District and I continue to lobby to get the government to turn us into an 'attack brand' for UK tourism. However I think we can do even more. I would like the Government to look at the impact of cutting VAT for the tourism industry because I think it could boost trade and support our local economy," he said.
Cut VAT
The UK's hospitality sector currently pays the standard 20 per cent of VAT, compared to 10 per cent in Spain and Italy, 7 per cent in Germany and France and 9 per cent in Ireland.
A cut of 15 per cent to 5 per cent would create an extra 80,000 jobs and generate £2.6bn for the Treasury over 10 years according to the Cut Tourism VAT, the group led by the British Hospitality Association (BHA), British Association of Leisure Parks, Piers and Attractions, Bourne Leisure Group and Merlin Entertainments Group.
The move would also entice more UK families to holiday at home according to Bourne Leisure director Dermot King. At the second British Hospitality and Tourism Summit in London earlier this month, King claimed it was a 'national scandal' that UK families were taxed more to stay in the UK than go to France or Germany on holiday.
Farron's support comes at the BHA declared it was gaining momentum for its Adopt an MP campaign which it launched in 2011 and which has been 'revitalised' this year.
Cut Tourism VAT Graham Wason welcomed Farron's support.
“Tim understands the need to help leading UK destinations remain competitive against those elsewhere in Europe. For areas like the Lake District tourism has a critical role in the local economy.
"The UK charges more than double the VAT for hotels in France or Germany - this means we’re losing jobs and investment. Our high rate of VAT also means asking British families to spend more in tax if they choose a domestic holiday," he said.