HOLIDAYMAKERS will cut back on spending triggering job losses if they are hit by a “tourist tax”, hospitality chiefs warn.
Travellers face paying a new levy for each night they stay in hotels or Airbnb-style accommodation under plans being considered by the Treasury.
Hotel, pub and restaurant bosses are concerned as the possible move comes just two months after Tourism Minister Chris Bryant told MPs the government “had no plans to introduce a tourism tax”.
Edinburgh will bring in a visitor levy next July with a 5 per cent rate.
It would mean an effective tax rate of 27 per cent including 20 per cent VAT and VAT on the tourist tax itself.
A surcharge on UK stays, that are expected to come in at next week’s Budget, would cost consumers more than £500 million based on usual travel habits.
Powers are due to be given to mayors the power to bring in the surcharge for overnight stays.
Hundreds of millions of pounds could be raised for mayors such as London Mayor Sadiq Khan and also Greater Manchester Mayor Andy Burnham.
Kate Nicholls, Chair of UKHospitality, said if the move goes ahead it would be “another shocking U-turn”.
She added: “I know the Government is worried about the cost of living, but this holiday tax is little more than a higher VAT rate for holidaymakers.
“Brits take over 89 million overnight trips in England, and stay for a total of 255 million nights. This is a bill we will all have to pay, and will only serve to ramp up prices and drive inflation.
“We need to get consumers spending. But this, on top of the huge damage from last year’s Budget, would only mean people cut back more – and more jobs are lost.
“Hospitality cannot foot the bill for the rest of the economy yet again.”
A Ministry of Housing, Communities and Local Government spokesperson said: “We are always open to hearing views from local leaders on issues like this.
“Places can already choose to introduce a levy on overnight stays through the Accommodation Business Improvement District model.”
