Scottish snow sport resorts left reeling by ski lift VAT charges

SCOTTISH snow sports resorts are being disadvantaged because VAT is being charged on ski lifts which are being classed as private transport, it is claimed.

Highlands and Islands MSP Dave Thompson has taken the issue up with Danny Alexander, the Chief Secretary of the Treasury, whose constituency covers the Cairngorms.

Mr Thompson argues that rules on VAT dating back to 1973 state that only vehicles capable of carrying more than ten passengers can be classed as public transport and be exempt from the imposition of the tax.

"This means that bureaucrats interpret individual seats on ski lifts, which can typically carry no more than three passengers, as private transport and fares are therefore subject to VAT," Mr Thompson said.

"While officials throughout the rest of Europe recognise that capacity should be measured by the size of the total ski lift, Britain classes individual seats on ski lifts as separate vehicles, meaning that the majority of ski passes in Scotland are more expensive."

One exception to the VAT problem is CairnGorm Mountain's funicular railway because individual carriages can carry more than ten passengers. The two funicular carriages carry 120 skiers the 2km from the car park to the slopes.

The SNP MSP said it would take a modest change in the rules or their interpretation to allow ski lifts to be classed as public transport.

And he said the addition of an extra tax on ski lift passes has a damaging impact on the competitiveness of Scottish ski resorts, particularly when they are added in advance to the costs of holiday packages with flights and accommodation.

He added: "The winter season is fast coming upon us and I hope that the minister will be able to move fast enough this year to end this unfair situation where Scottish resorts are subject to an additional levy which does not encumber their competitors in other countries."

CairnGorm Mountain finance director Sandra Murray welcomed Mr Thompson raising the issue with the Treasury.

A Treasury spokesman said: "Ski lifts carrying under ten passengers in both the UK and other EU member states cannot have their VAT rate changed to zero, because under the terms of long-standing agreement with our EU partners member states cannot extend current zero rates or introduce new ones.

"The UK's independent VAT tribunal has confirmed that ski lift systems are not vehicles in their own right but are the mechanism for moving the gondolas. It is only where the individual gondolas are capable of carrying ten or more passengers that VAT would not be charged."

Scotland's five ski resorts are hoping for another good season after last year was the best for 16 years.The CairnGorm centre opened on 28 November and remained open well into June.

In 2009 just 159,000 skier days were recorded across Scotland, but this year it was nearly 380,000.