A government consultation on proposals to give Mayors power to levy a tourist tax closed yesterday.
‘Worst time’
UKHospitality, in its response to the proposals, said it was the “wrong policy at the worst time”
With the sector facing sharp increases in employment costs and business rates following the 2026 revaluation, with some accommodation businesses seeing rateable values nearly double, the trade body warned there was little scope to absorb new charges without damaging growth and investment.
UKHospitality also cautioned that a levy would raise the cost of holidays for households facing cost of living pressures, and impact business and events travel.
With the UK already applying one of the highest VAT rates on accommodation in Europe, additional charges risk undermining international competitiveness and discouraging domestic breaks, particularly for families and young people.
Questions remain
Questions remain over how a levy would operate, with different approaches across mayoral areas having the potential to create a confusing patchwork of rules and higher compliance costs for multi-site operators.
Kate Nicholls, chair at UKHospitality, said: “This is the wrong policy at the worst possible time. Accommodation businesses are already battling enormous cost increases and declining confidence. Adding a new tax on to family holidays, business travel and international tourism will strangle growth, reduce investment and put jobs at risk.
“A tourist tax will make England less competitive internationally and hit the very visitors the Government says it wants to attract. While we urge Government to rethink this policy entirely, if it does go ahead, it must be designed in the least damaging way, with national consistency, a simple flat fee model, and receipts used for the benefit of hospitality and tourism, alongside genuine involvement from the businesses expected to deliver it.”
