The Labour Party government is planning to hand mayors in England new powers to introduce a nightly levy on staycations, a move that could affect holidaymakers booking hotel stays and Airbnb trips. The change would allow mayors to charge a fee to visitors staying overnight and decide how the revenue raised should be invested.
Housing secretary Angela Rayner is meeting mayors on Thursday and is expected to outline the change. Ms Rayner will flesh out how the levy will be charged, with reports suggesting it could be a percentage of the cost of accommodation, rather than a flat fee, in order to protect budget holidays.
Hospitality trade warns of job risks
Allen Simpson, chief executive of UK Hospitality, warned the plans would put jobs at risk in some communities, saying that a new tourism tax in Edinburgh is “already having damaging effects”. Speaking to BBC Radio 4’s Today programme, Simpson said holidays in the UK are “already more expensive” than they appear because of higher VAT.
“What we’re talking about here is an open-ended power for mayors to set tourism taxes at any level they want,” said Simpson. “And remember that if you go to Paris, if you go to Rome, if you go to Berlin, you’re paying a small tourism tax, but it’s capped.”
No cap on levy under Scottish model
Simpson added: “It will be the case that you’ll have holiday parks which can’t open in the shoulder seasons and of course people who go on holiday will just have that little bit less money in their pocket.”
Bosses said they had been led to believe that the levy would be capped, as is the case in Wales. However, England will now follow the Scottish model, where there is technically no upper limit on what can be charged.
Shadow chancellor criticises unlimited tax
Andrew Griffith, the shadow chancellor, told the Telegraph newspaper: “An unlimited tourist tax would be hugely limiting for the chances of the young people who might otherwise be employed in tourism and hospitality.”
The proposals, which would apply across England, are expected to be confirmed following Thursday’s meeting between Ms Rayner and regional mayors, with the exact mechanism for charging the levy still to be detailed.
