Chamber of Commerce representatives from the hospitality sector met the Northern Ireland Affairs Committee on Wednesday 14th October, bringing local business perspectives to its inquiry into the taxation of hospitality and tourism in Northern Ireland.

Held at Bishop’s Gate Hotel, the roundtable provided an opportunity to discuss the pressures facing the sector and the particular challenges of operating in a border region. The Committee’s visit also included its first public evidence session outside Belfast since June 2018, and its first in Northern Ireland during the current Parliament.

Discussions focused on differences in VAT and operating costs between Northern Ireland and the Republic of Ireland, the potential impact of a reduced hospitality VAT rate, and wider policy measures to support business competitiveness.

For Derry and the wider North West, these issues have direct consequences. Hotels, restaurants and visitor attractions compete within a shared tourism market, yet businesses just a short distance apart operate under different tax systems. Decisions about where visitors stay and spend affect not only hospitality businesses, but also local retailers, suppliers and employment.

The Chamber’s message was that government policy must recognise this reality. Businesses need greater scope to manage rising costs, retain staff and invest in their premises and services.

Members invited to contribute included representatives from the Ebrington Hotel, Fir Trees Hotel, Holiday Inn Express, Lo & Slo, The Sandwich Co., Walled City Brewery and The Belfray Country Inn.

Committee calls for four-year VAT pilot

Following its inquiry and visit to the city, the Committee has written to the Chancellor of the Exchequer recommending a four-year pilot reducing VAT on hospitality food and accommodation in Northern Ireland from 20% to 10%, excluding alcohol.

Published on 22nd October, the letter recognises the pressures facing the sector and the competitive disadvantage experienced by businesses close to the border. The Committee argues that a four-year trial would give businesses time to invest, adjust pricing and win new contracts, while allowing the impact on employment and economic growth to be assessed.

The proposal remains a recommendation to government. It nevertheless provides a clear ask ahead of the Budget and reflects the concerns raised by businesses across the sector.

The Chamber welcomes the Committee’s engagement with the North West and thanks members for sharing their experience, helping ensure that local business concerns are heard directly at Westminster.

Read the Committee’s letter to the Chancellor.