British holidaymakers are unlikely to cut back on travelling this year because of the VAT rise.
If everything seems to be going up except your salary and you’re wondering how the VAT rise will affect your travel plans, relax. A recent survey by Sainsbury's Travel Insurance found that 13 million Britons were expected to book a holiday in January and February, that’s 50 per cent more than during the same period last year, reports the Daily Telegraph. This is because independent travellers will hardly be affected.
Remember that both flights and bookings made with hotels abroad are exempt from the VAT rise. While Britain charges full VAT on hotel rooms and restaurant meals, other European countries don't, so in Germany VAT on hotel rooms is only 7 per cent and in France just 5.5 per cent, making a ‘staycation’ a less appealing option.
Holidaymakers booking a package may pay slightly more, although an added 2.5 per cent on a £500 holiday is only £12.50. A spokeswoman for travel association Abta said that its members were not anticipating significant rises in holiday prices. Some tour operators may not pass on the rise to customers in order to remain competitive, so make sure you shop around. Ultimately, we hold our annual holiday dear and would rather cut back on other costs, so expect to find the airports still buzzing.