UKHospitality has warned that the government’s proposed holiday tax could increase costs for holidaymakers by £1.6bn and put 33,000 jobs at risk.
The trade body said the proposed levy is “unlimited, uncapped and expansive” and argued that the economic impact could be significantly greater than previously estimated.
At the last Budget, the government announced a new discretionary power for Mayoral Strategic Authorities (MSAs) to introduce a visitor levy on short-term, commercially let overnight accommodation in England and launched a consultation on the design.
This power will give mayors control of a new local revenue-raising power to drive growth in their regions, including in the visitor economy. Mayors will need to decide whether to implement a levy, and, if so, they will need to consult on specific proposals, including the rate and how revenue will be used in their region.
According to analysis by Oxford Economics, assuming the impact of a 5% levy is fully realised by 2030, the tax could reduce UK GDP by £2.2bn and tourism spending by £1.8bn. It could also result in 11.9 million fewer nights being spent in accommodation and reduce direct investment from hospitality and tourism businesses by £101m.
Polling commissioned by UKHospitality, in partnership with Butlin’s, Haven and Hilton, found that 56% of respondents oppose the proposed holiday tax, compared with 24% who support it. The polling also found that one in five people would be prevented from booking a holiday in England if the levy increased the cost of a break.
UKHospitality also highlighted the difference between the UK’s 20% VAT rate on accommodation and rates in other European destinations. VAT on accommodation is 10% in France, Italy and Spain, 13% in Greece and 6% in Portugal, according to the trade body.
Allen Simpson, chief executive of UKHospitality, said: “The millions of families who will be forced to pay significantly more for their holiday will hardly be comforted by their money going to prop up local government, when they’re struggling to make ends meet. The 33,000 people who could lose their jobs as a result of this tax, during an employment crisis, will be rightly furious.
“In a week when the Government has talked about growth, cutting red tape, getting people back into work and supporting hospitality, it is set to announce yet another tax that will do the absolute opposite. Give Mayors one tax-raising power on one sector and they will pull that lever until it snaps. You just need to look at the long list of Mayors already lining up to do just that.”
Simpson added: “The government claims this tax is normal. It’s not. There are scant examples of a destination with our 20% level of VAT and a holiday tax, for a reason. If it wants to use that argument, it should practice what it preaches and lower hospitality VAT to 10%, in line with Europe.
“It’s now more important than ever that the Budget reduces hospitality’s costs, given the holiday tax is set to increase them once again. Tinkering around the edges is not enough. There has to be a substantial reduction in hospitality’s tax burden next month. Cut VAT, fix business rates and reduce NICs.”
UKHospitality has warned that the government’s proposed holiday tax could increase costs for holidaymakers by £1.6bn and put 33,000 jobs at risk.
The trade body said the proposed levy is “unlimited, uncapped and expansive” and argued that the economic impact could be significantly greater than previously estimated.
At the last Budget, the government announced a new discretionary power for Mayoral Strategic Authorities (MSAs) to introduce a visitor levy on short-term, commercially let overnight accommodation in England and launched a consultation on the design.
This power will give mayors control of a new local revenue-raising power to drive growth in their regions, including in the visitor economy. Mayors will need to decide whether to implement a levy, and, if so, they will need to consult on specific proposals, including the rate and how revenue will be used in their region.
According to analysis by Oxford Economics, assuming the impact of a 5% levy is fully realised by 2030, the tax could reduce UK GDP by £2.2bn and tourism spending by £1.8bn. It could also result in 11.9 million fewer nights being spent in accommodation and reduce direct investment from hospitality and tourism businesses by £101m.
Polling commissioned by UKHospitality, in partnership with Butlin’s, Haven and Hilton, found that 56% of respondents oppose the proposed holiday tax, compared with 24% who support it. The polling also found that one in five people would be prevented from booking a holiday in England if the levy increased the cost of a break.
UKHospitality also highlighted the difference between the UK’s 20% VAT rate on accommodation and rates in other European destinations. VAT on accommodation is 10% in France, Italy and Spain, 13% in Greece and 6% in Portugal, according to the trade body.
Allen Simpson, chief executive of UKHospitality, said: “The millions of families who will be forced to pay significantly more for their holiday will hardly be comforted by their money going to prop up local government, when they’re struggling to make ends meet. The 33,000 people who could lose their jobs as a result of this tax, during an employment crisis, will be rightly furious.
“In a week when the Government has talked about growth, cutting red tape, getting people back into work and supporting hospitality, it is set to announce yet another tax that will do the absolute opposite. Give Mayors one tax-raising power on one sector and they will pull that lever until it snaps. You just need to look at the long list of Mayors already lining up to do just that.”
Simpson added: “The government claims this tax is normal. It’s not. There are scant examples of a destination with our 20% level of VAT and a holiday tax, for a reason. If it wants to use that argument, it should practice what it preaches and lower hospitality VAT to 10%, in line with Europe.
“It’s now more important than ever that the Budget reduces hospitality’s costs, given the holiday tax is set to increase them once again. Tinkering around the edges is not enough. There has to be a substantial reduction in hospitality’s tax burden next month. Cut VAT, fix business rates and reduce NICs.”
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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