The proposed tourism tax expansion across the UK has been hit with further backlash.
Under the government’s plans, city mayors and town officials could be given the authority to charge a small overnight levy. It would apply tourists staying at bed and breakfasts, hotels, hostels and holiday lets.
But, the Confederation of British Industry (CBI) has spoken out against the plans and business owners have warned a tourism tax could add £500million a year to the cost of UK breaks.
Bosses from the organisation claim the extra fee could cause inflation to increase too.
According to UK Hospitality, a tourism tax could add £100 to a two-week family holiday if a charge of £2 a night was added.
Allen Simpson, UK Hospitality CEO, told The Sun: ‘The Government should keep relaxing, not taxing.’
Meanwhile Alice Jeffries, head of tax policy at CBI, claimed the fee could even cause employment issues and create tight margins for the industry.
She said: ‘The Government should be sending a clear message that Britain is open for business and tourist visitors alike – not making it harder for people to spend their time and money here.’
Business owners have warned the proposed holiday tax could add millions to the cost of UK breaks a year
A tourism levy is already in place in Manchester, where tourists are charged £1 plus VAT per room, per night.
A spokesperson for the government said the exact design for a tourism tax ‘has not been decided’ and explained how it will help areas ‘benefit from tourism’ as well as give mayors more cash ‘to invest in local priorities’.
Last week, Butlin’s chief executive, John Hendry Pickup, shared his take on how it could impact families across Britain on Good Morning Britain.
Hendry Pickup, who has been at the helm of the holiday park for three years, told ITV hosts Adil Ray and Ranvir Singh the tax ‘feels at the moment that it’s going to hit the people who can afford it the least, the most, and I don’t think that’s fair’.
He explained how he saw it as a ‘ UK tax on UK families going on UK holidays’ and Butlin’s breaks outside of school holidays usually come to around £49 for a family of four, for four nights.
But with the additional fee of £2 a night, for example, it works out as a ’66 per cent tax on the people who can afford it the least’.
As for the impact it might have on Butlin’s, Hendry Pickup insisted ‘it won’t make our business unsustainable, we’re still full at the moment’.
However, he stressed that the tax ‘makes it extremely difficult for people who are coming to spend time with us outside of school holidays’.
Alice Jeffries, head of tax policy at CBI, claimed the fee could even cause employment issues and create tight margins for the industry
Butlin’s chief executive, John Hendry Pickup, shared his take last week on how the proposed expansion of a tourism tax in the UK could impact families across Britain on Good Morning Britain
Butlin’s is known for providing good-value breaks for families and has three sites across Skegness, in Lincolnshire, Bognor Regis in West Sussex, and Minehead in Somerset.
The beloved hospitality company is set to celebrate it’s 90th birthday this weekend and a special break has been planned dedicated to marking the huge milestone.
Hendry Pickup argued it could force families to ‘make a decision about whether they go on holiday or not’.
The government suggests mayors could use the revenue from the tax to invest the local area’s transport and infrastructure.
In popular destinations across Europe, holidaymakers are charged ‘tourism taxes’, ‘city levies’ or ‘eco-fees’, often per night of their stay.
For example, tourists heading to check out the vibrant nightlife, colourful architecture and culture of Amsterdam are expected to pay 12.5 per cent extra on top of the cost of their hotel room – one of the highest visitor charges in Europe.
As for a tourist tax being introduced across the UK, Hendry Pickup argued: ‘I think it depends upon what the purpose is in the first place, if you look at what happens with that type of levy in different European countries, they use it for different purposes.’
He went on to note how in Barcelona, officials use a similar tax to tackle overtourism.
‘We as an industry, the tourism industry in the UK, is already taxed at the highest rate of any of the major European economies,’ Hendry Pickup continued.
Concerns over how the tourism tax will impact people have previously been raised, and the commercial director for Business Travel Association recently revealed it could cost businesses more than thousands of pounds a year.
Andrew Clarke told the Daily Mail an additional charge could cause businesses to ‘certainly consider their budgets’.
‘We’ve got one client that’s speaking to us on a regular basis that puts around 10,000 room nights into Aberdeen at an average room night of £150,’ he said, explaining the company works in the oil and gas industry.
With this example, a seven per cent charge on 10,000 rooms in the Scottish city would work out at £105,000 a year.
‘That’s quite a significant increase on a corporate business’s travel budget,’ Clarke added.
As a result, other options like staying out of the city charge zones could be considered – driving business away from the centre.
‘I think people will start to look at alternative options. Can I stay just outside the city centre and use taxis? What’s the local transport situation like?’ Andrew said.
Business Travel Association boss Andrew Clarke previously outlined how the additional charge could impact companies
But others have been much more positive about the proposals, and it was recently revealed a tourist tax on overnight visitors to London could raise more than £350million a year for the capital.
This is significantly higher than previous forecasts, which suggested such a levy could raise £240million annually.
The figure from Central London Forward (CLF), which represents 12 central London local authorities, is based on a three per cent levy on the cost of a room, whether a hotel or short-term let, according to BBC News.
The analysis shows the 12 CLF boroughs alone would raise £275million, with the remaining authorities yielding an estimated £77million, the BBC reports.
This has sparked calls from the central boroughs to retain half of the additional income to mitigate the increased cost pressures of tourism.
Westminster could raise more than £95million by itself, according to visitor estimates, with Camden, Kensington and Chelsea, and Tower Hamlets all forecast to bring in more than £20million annually.
It has not yet been decided how any money raised from a tourist tax in London would be split between City Hall and local authorities.
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