The Country Land and Business Association (CLA) is calling for a permanent reduction in VAT to 12.5% for accommodation and attractions enterprises to boost rural tourism.

The CLA said it has submitted written representations to the Treasury to be considered as part of the decision-making process in the lead-up to the spring budget on March 6, 2024.

As well as reducing VAT, the association's other recommendations include:

Extending relief to the purchase of energy-saving materials and their installation to support the decarbonisation of owner-occupied and rented homes;
Simplifying the tax system and encouraging investment in agricultural buildings, equipment ad infrastructure;
Proceeding with legislation to ensure land used for environmental delivery/ecosystem services is not subject to inheritance tax;
Keeping the framework of capital taxes stable to give confidence to those planning the reorganisation of substantial but illiquid capital assets.

CLA president Victoria Vyvyan said: “The CLA and its members are well-placed to help government achieve its ambitions to deliver growth and create a fairer and greener country.

“To enable growth in the rural economy, the government needs to fund the agricultural transition so that we can grow food and enhance the environment.

Vyvyan said rural tourism is an important and exciting sector, but that VAT rates need to be internationally competitive to help it reach its full potential.

“France and Spain pay half the VAT we do and that undermines our competitiveness," she said.

“With VAT permanently at 12.5%, we estimate that over a 10-year period, the tourism sector would be able to stimulate an additional £2 billion for the rural economy, generating extra revenue for the Treasury.”