UK Staycation Costs to Increase by £100 Under Proposed Holiday Tax
UK families planning domestic holidays could see their expenses rise by approximately £100 due to a new holiday tax proposed by the Labour Party government. The tax would apply to overnight accommodation, including hotels, bed and breakfasts, campsites, and holiday homes.
Industry Leaders Voice Strong Opposition
Major holiday resort operators such as Butlin’s, Haven, and Parkdean Resorts have written to Chancellor Rachel Reeves, criticizing the planned levy as detrimental to the tourism sector. In a joint letter, they argued that the tax would discourage visitors and negatively impact employment.
Allen Simpson, chief executive of UKHospitality, stated: "Holidays are for relaxing — not taxing. Whether enjoying a city break, rural retreat or beach holiday, you’re already paying your tax fair share. It’s one of the highest tax rates for visitors in Europe and the holiday tax will only increase that further."
Political Criticism and Economic Concerns
Conservative Party Shadow Business Secretary Andrew Griffith condemned the proposal, saying: "We’ve a one-trick, miserablist, tax raising government. They’ll tax you more if you drive your car, get on a plane and now if you stay in a bed on holiday."
The hospitality and tourism industry supports around three million jobs across the UK, ranging from cleaners and reception staff to chefs and entertainers. The letter from resort bosses warns that fewer visitors could lead to reduced shifts, job losses, and fewer opportunities, particularly in entry-level and return-to-work roles.
Financial Impact on Families
A family of four on a two-week holiday could see their costs increase by up to £112 under the new tax. This additional expense comes at a time when many households are already facing financial pressures, potentially making staycations less affordable for average families.
Government Response and Local Implementation
A government spokesman defended the policy, stating: "Tourists travel from near and far to visit England’s brilliant cities and regions. We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investment in the economy."
The spokesman added that any new charges are expected to be modest and in line with international standards, with mayors having discretion to set appropriate levels for their areas.
Regional Variations and Precedents
Starting in summer, Edinburgh will implement a 5% levy on hotel, B&B, and holiday bookings. Other Scottish cities like Aberdeen and Glasgow have also agreed to introduce visitor levies, while some councils, including Orkney and Shetland, have rejected the idea.
This regional approach highlights the varying attitudes towards tourism taxes across the UK, with some areas embracing them as a revenue source for local projects and others concerned about their impact on visitor numbers.
