Mayors across England will soon have the authority to implement tourist taxes, as announced by the government. This move comes just a day before the budget, with communities secretary Steve Reed revealing that mayors will have the power to levy a «modest» charge on overnight visitors in various accommodations like hotels, bed and breakfasts, guest houses, and holiday lets.
The funds generated from these taxes are earmarked for investments in local transport, infrastructure, and the visitor economy, aiming to potentially attract more tourists. Prominent regional Labour leaders such as London Mayor Sir Sadiq Khan and Greater Manchester’s Andy Burnham have been advocating for this measure.
Despite the positive reception from some quarters, the hospitality industry has criticized the move, labeling it as «damaging.» The introduction of these visitor levies will bring England in line with Scotland and Wales, both of which are already implementing similar tourist taxes.
Officials argue that aligning English cities with other global tourist destinations like New York, Paris, and Milan, which already have tourist taxes, will have minimal adverse effects on visitor numbers. Sir Sadiq expressed enthusiasm for the tax, emphasizing its potential to support London’s economy and bolster its status as a global tourism and business hub.
The Greater London Authority estimates that a £1 per day levy could raise £91 million, while a 5% levy could generate £240 million. Similarly, Mr. Burnham believes that the tax will enable Greater Manchester to invest in crucial infrastructure to enhance the visitor experience.
On the opposing end, Lord Houchen, the Conservative Tees Valley mayor, has declined to introduce a tourist tax, stating, «Thanks, but no thanks.» Conservative shadow local government secretary Sir James Cleverly has criticized the move as yet another burden on British holidays, increasing costs for families and impacting British hospitality.
Kate Nicholls, chair of UKHospitality, has raised concerns about the potential negative impact of the «damaging holiday tax,» estimating that it could cost the public up to £518 million. She warns that this cost will be passed on to consumers, driving inflation and undermining the government’s efforts to reduce the cost of living.
The proposed plans will undergo a consultation period until 18 February, during which considerations will be made regarding the possibility of implementing a cap on the tax amount.
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