VAT rates

[babs135]

Talking to someone about coming out of Europe with 'no deal' and he thought one way Boris could keep the economy moving would be to lower VAT.  With this in mind would lowering the rate have any impact on cruise holidays?

[John Bull]

45 minutes ago, babs135 said:

Talking to someone about coming out of Europe with 'no deal' and he thought one way Boris could keep the economy moving would be to lower VAT.  With this in mind would lowering the rate have any impact on cruise holidays?

 

A VAT reduction would benefit thee and me in our everyday lives, and doubtless stimulate the economy (though at the expense of the equivalent reduction in the govt's income).

But I think any impact on cruising would be very minor.

 

Cruising is taxed as mass "transportation", which is zero-rated. In other words, other than on any cruise agents' commissions,  there's no VAT on cruise tickets. And that includes the other elements in a cruise ticket - regular dining etc - which are regarded as ancillaries to that transportation.

 

Cruising is almost-entirely international, so there's no VAT on purchases aboard the ship - and more importantly no duty on alcohol. (The main benefit goes to the cruise lines because just like airport duty-frees the prices reflect only a small proportion of the VAT & duty savings, but I guess it helps to keep the ticket prices down.)

 

Theoretically ship-board purchases on cruises from the UK which go only to  EU countries are subject to VAT, but I've not heard from anyone who's been charged VAT on cruises from the UK - perhaps because they include Guernsey, which is outside the EU tax zone.

When (if ) Brexit happens, travel which includes any port outside the UK tax regime will definitely put an end to any VAT on shipboard purchases, with the possible exception of time spent in UK waters (reminds me of the rush for duty-frees on X-channel ferries in the days before the Common Market )

 

So the only differences I can think of are to excursions ashore in the UK (which are subject to 20% VAT) and purchases ashore in the UK. Which of course would benefit tourists to the UK, incl pre-cruise and post-cruise time.

 

Boris is planning to spend money on more police, a northern cross-rail link, road infrastructure, schools, health service, & a raft of other things.

I don't see that the coffers would also permit a reduction in VAT, so don't hold your breath 

 

JB 

[yorkshirephil]

I would be surprised if we saw any difference if VAT was reduced, prices are typically driven by supply and demand. The main things that are likely to affect cruising are oil pricing and exchange rates and maybe wage structure to a degree. 

[MicCanberra]

IME, governments only ever increase VATs or GSTs or whatever the respective country call it. I would be very surprised if VAT was reduced. More likely a stimulus of the economy via other means would occur. Income tax or one off payments are a much more likely mechanism.

[downsmead]

Any cruise where all the ports are within the EU does have VAT charged for purchases from the shops - 22% on our recent Constellation cruise. The alcohol shop was closed for the cruise. VAT was not charged on excursions, speciality dining or drinks.