How a 15% VAT cut would affect theme park pricing

Merlin Entertainments – among a growing number of others in tourism – have long been calling for the government to slash VAT from 20% to 5% on their business.

VAT, or value added tax, is applied by the British government on the vast majority of products and services people pay for in their daily lives.

Business figures argue that a cut would boost tourism and generate extra revenue for the government treasury.

Here’s an example of how some theme park prices would be affected if a 15% cut was introduced, and more importantly passed on, to visitors:

Alton Towers/Thorpe Park – Admission would fall from £42 to £35.70, or from £21 to £17.85 with 2 for 1 vouchers.

Pleasure Beach Resort – £27.20 would be the price replacing the current £32 wristband charge, the usual online advance booking would fall from £27 to £22.95.

The campaign also calls for a matching VAT cut for hotel stays, which many theme parks now offer.

The obvious advantage to the businesses is that they could instantly advertise a 15% reduction in price, while their actual income from each ticket sale remains the same.

It would seem likely that visitor numbers would rise following such a move, but whether or not it would be big enough to recoup the government’s losses from the taxation slash is another question.

Could we also trust parks to pass on the full 15% cut to their customers?

What do you think of the campaign to reduce VAT? You can leave your comments using the form below.