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UK: Business interest group Confederation of British Industry (CBI) has claimed that a proposed English holiday tax could cost £500 million.
The Government plans to introduce vacation tax authority to Mayoral Strategic Authorities, allowing mayors and town officials to create overnight visitor levies on hotel, short-stay and bed and breakfast visitors.
Cities like Manchester and Liverpool have used a workaround to establish fees. However, their projected figures seem slim compared to CBI estimates. Manchester projects £3.8 million each year from its tax, and Liverpool £939,000.
In Manchester’s Accommodation BID zone, £1 a night per room/unit is added to guest’s stays. In place since 2023, the City Visitor Charge directs those funds into efforts such as tourism marketing campaigns, large-scale events, conferences and festivals and improving guest welcome and street cleanliness.
But industry bodies say allowing these levies across England could have negative effects. Hospitality UK said a two-week vacation could cost up to £100 more under a possible holiday tax.
As multiple municipalities either have already implemented taxes or consider them, CBI tax policy head Alice Jeffries claimed such fees could create tight margins and employment concerns for the industry.
“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,” Jeffries said.
Jon Hendry Pickup, CEO of value seaside resort chain Butlin’s, made an appearance on Good Morning Britain to discuss the legislation.
“For a lot of our families, outside school holidays, they’ll pay £49 for a family [of four] for four nights, so £12.50 a night,” Hendry Pickup said. “If you put a £2 a person tax on that, that’s a 66 per cent tax. That’s a 66 per cent tax on the people who can afford it the least.”
However, Hendry Pickup noted the details of the tax are essential to understanding its value. Barcelona, for example, uses it to combat overtourism.
“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.”
Legislation has yet to be tabled. If it comes to pass, there will be industry-wide effects depending on how local authorities choose to use vacation tax powers.
Highlights:
- The Confederation of British Industry claims a proposed English holiday tax enabling mayors to levy overnight visitor charges could cost the tourism sector £500 million.
- Manchester’s existing £1 per night Accommodation BID charge could generate £3.8 million annually, while Liverpool projects £939,000.
- Hospitality UK warns a two-week holiday could cost up to £100 more, with CBI tax policy head Alice Jeffries stating the government should signal Britain is open for visitors rather than imposing barriers.
- Butlin’s CEO Jon Hendry Pickup noted a £2 per person tax on a £49 four-night family break would represent a 66 per cent levy on those who can least afford it, but added the tax’s purpose determines its value.
