Cumbria Tourism is warning that potential Government plans to reduce the VAT threshold could have a damaging effect on small businesses.

Cumbria Tourism represents around 2,500 member businesses and is alarmed to read reports that the VAT threshold might be lowered. It’s feared such a move would negatively impact smaller business operators such as B&Bs and guesthouses by increasing costs, reducing competitiveness and adding unnecessary administration burden.

As the official Destination Management Organisation for the county’s £2.72 billion visitor economy, it is calling for the Government to maintain the current level of registration.

Board member Haydn Spedding is Cumbria Tourism’s small business representative. He says, “The reliance on the visitor economy in a rural county such as Cumbria, with a population of under half a million, is disproportionately significant. The majority of tourism related operators in the county are small businesses and therefore any uncertainty of negative changes to VAT thresholds would have an impact on the economy as a whole.”

Haydn adds, “A recent Cumbria Tourism Business Performance Survey revealed that 60% of respondents are already concerned about increased costs. This is coupled with other challenges facing the sector including online travel agencies, staff availability and the concerns over Brexit and its potential impact on operating costs, border controls and recruitment. Any further changes that impact on costs and profit will undoubtedly force a number of small business owners out of business.”

Cumbria Tourism has called for the support of The Tourism Alliance to help lobby the Government on the issue and is also requesting that the flat rate for VAT continues to increase with inflation.

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