Bed tax on pubs ruled out by Government minister

The Government has ruled out the possibility of implementing a bed tax, after the Lyons Inquiry this week recommended a consultation on the proposed legislation and suggested it may work in some areas.

The Lyons Inquiry into local government funding said it did not recommend a generally-applicable bed tax.

However, the report said that in some areas there maybe a case for a tourist-related tax developed in partnership with local businesses and residents - possibly through an annual bed licensing scheme levied on operators or alternatively by directly levying the tax on overnight visitors.

Sir Michael Lyons said: "The government should consult on the costs and benefits of providing a permissive power for local authorities to levy taxes on tourism, including a possible tax on accommodation, and whether local authorities would use such a power."

However, the Department for Communities and Local Government said following the report it was not inclined to introduce such a tax.

Phil Woolas, local government minister, said: "Sir Michael examines the case for a tourist tax. He concludes that there is not a strong evidence base for the introduction of such a tax.

"While he puts the case for a consultation on this issue, we are not, therefore, inclined to focus on this area. The government does not intend to introduce a tourism tax."

The report says councils should get to charge businesses a supplementary tax to fund specific projects to improve the local area. It also calls for Government to review systems of relief and exemptions from business tax. It says any changes should follow "wider consultation" with the business community.