Representatives of the tourism industry have called for a VAT reduction to boost exports and halt decline in key markets and have made a submission to the Chancellor of the Exchequer ahead of the Autumn Statement.

The Campaign for Reduced Tourism VAT represents more than 3,500 individual establishments in the hospitality sector and more than 40 national and regional associations. The campaign seeks a level playing field with the UK’s tourism competitors on the EU which apply VAT at reduced rates.

Recent research on tourism VAT, using the Treasury’s economic model, found that a reduction for accommodation and attractions would be revenue neutral and contribute an additional £4bn each year to the UK’s economy.

The campaign is being led by a number of high profile groups, including the British Hospitality Association, British Association of Leisure Parks, Piers and Attractions, Bourne Leisure Group and Merlin Entertainments Group.

Nick Varney, chief executive of Merlin Entertainments, commented: “The government is currently promoting its export credentials but has failed to recognise that tourism is an export sector. It has loaded tourism taxes, such as VAT, and increased other barriers to a point where we are now losing market share to our rivals.”

Tourism is one of only a limited number of goods and services for which the EU allows member states to apply a reduced rate and the majority of nations do this because it makes their tourism industry more competitive, encouraging growth in the sector. Tourism in the UK is the sixth-largest export earner and the only sector which has its exports subject to VAT.