A trade body has urged the Government to abandon plans to introduce a tourist tax on the hospitality sector, saying the measure will have a “damaging effect” on the industry.
In a letter addressed to the Chancellor Philip Hammond, Kate Nicholls, chief executive of UK Hospitality, has outlined her concerns over the proposed new tax.
The proposals were first put forward this year after councils argued that they were seeing little benefit from increased tourism in certain regions, despite having to foot the bill for increased security and usage of other local amenities.
Under current plans, the tax would see a £1 to £2 levy placed on visitors during their stay. The levy could be enforced all year round or just during key events. Edinburgh, for example, has revealed that it plans to place a £1 “visitor levy” per person per night, while it is believed that popular tourist locations Bath and Oxford plan to charge a £2 tourist tax on visitors during the 2022 Commonwealth games.
However, Ms Nicholls says the planned levy would wreak havoc on the hospitality sector, which currently employs around one in 10 of the working population.
“I am writing to convey our profound opposition to such a policy and our sincere concern over the impact any additional taxation would wreak on an already-strained and over-burdened sector,” the letter is believed to say.
She adds that the tax could encourage negative scenarios, for example, where visitors reduce their stay or look for accommodation elsewhere.
“Conversely, those who come for a day trip, stay with friends or use a home-sharing service, such as Airbnb, will not contribute a penny, despite using local amenities.”
Commenting on the proposals, Mike Cherry, chairman of the Federation of Small Businesses (FSB), is in agreement that the tax could have an adverse effect on the sector.
“Small firms operating in the tourism sector are already up against high business rates, rising employment costs and surging input prices, particularly where utilities are concerned,” he said.
“Adding tourist taxes to the mix would mean yet another reason for small B&B, hotel and hostel owners to spend time away from running and growing their firms.”