The Government have confirmed that they will legislate to give mayors (and, potentially, other local leaders) the power to introduce new overnight visitor levies.
It is already the case that hotels and B&Bs pay VAT at 20 per cent, corporation tax, business rates and National Insurance. I believe that the Government's decision is therefore yet another tax on British holidays pushed by the Labour Government. It will drive up costs for hard-pressed families, and end up another kick to British hospitality.
Now, hundreds of bosses of leading UK accommodation firms have called on the Government to scrap the tax. They rightly argue that the UK hospitality sector contributes billions of pounds in tax through business rates, employment taxes and VAT, which at 20 per cent, is double the rate faced in places such as France, Italy, Spain or Portugal.
On top of this, the former Chancellor’s disastrous economic policies have put significant financial pressures on businesses, including those operating in the tourism and hospitality sectors. The 2024 Autumn Budget resulted in a £3.4 billion tax bill for hospitality businesses. In the months since the Budget, 89,000 jobs in hospitality were lost.
Tourism’s GDP impact in the UK totalled £147 billion and contributes at least four per cent to GDP across all regions and nations in the UK. It is vital that the Government supports businesses who create jobs and growth, not forces new taxes on them.