// BBC BUSINESS NEWS — FINANZA
VAT cuts won't lower prices for customers, say NI hospitality leaders
In NI and the rest of the UK hospitality VAT is 20%, compared to the Republic of Ireland's 9% on food and 13.5% on accommodation.
A VAT cut for hospitality businesses in Northern Ireland would not mean lower prices for consumers, MPs have heard.
The industry is asking the UK government for a VAT cut to compete with the lower rates charged in the Republic of Ireland.
Hospitality leaders say the cut is needed to help with squeezed profit margins and is a matter of survival, particularly for businesses in border areas.
The UK government has consistently rejected a call for a hospitality VAT cut saying it would be poorly targeted and too expensive.
The industry in Northern Ireland is making the argument that it has a special case due to direct competition with businesses in the Republic.
Michael Cadden, the chair of Hospitality Ulster, said: "We are currently victims of our geography."
In the Republic of Ireland, hospitality VAT on food is 9% and 13.5% on accommodation.
In Northern Ireland and the rest of the UK hospitality VAT is 20%.
Mr Cadden, who runs the Lusty Beg Island Resort in Fermanagh, said that while there had always been VAT differentials the ability of Northern Ireland businesses to deal with that has been "eroded" by other cost increases.