Rachel Reeves is about to hit holidaymakers with with another tax tamm | Politics | News
Families like these are likely to be hit with a holiday hammer blow (Image: Getty)
Rachel Reeves is facing growing pressure to scrap plans to tax people on holiday in the UK. Leisure bosses and MPs have called on the Chancellor to scrap the “Holiday Tax” as Britain is gripped by a major cost of living crisis.
The government is considering allowing mayors and other local leaders in England to impose a visitor tax in a bid to raise revenue. Such a move could add more than £100 to the cost of the two-week break.
Rachel Reeves (Image: Getty)
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A version of the measure is already in place in some British cities, but it’s something local businesses voluntarily add to bills instead of local authority tax. But major holiday providers such as Butlin’s, Hilton, Travelodge and the owner of Alton Towers theme park have told the government their proposals would siphon money from local businesses.
New polling released today (Monday) shows that public opinion against the move has increased, with those opposed (56%) more than twice as likely to support it (24%). The UKHospitality survey also reveals that voters are almost 10 times more likely to vote against an MP who supports the tax and threatens Labour’s majority in 200 seats.
Modeling shows that a majority of people oppose the tax in 574 of the UK’s 632 constituencies. Meanwhile, almost three quarters (73%) of people say a tourist tax would prevent them from holidaying in the UK, reduce the number of trips they take or reduce the amount they can spend on travel.
Around 39% said they would be more likely to take a holiday abroad, rising to 48% among the highest income households.
UKHospitality Chief Executive Allen Simpson said: “This vote should be a wake-up call to any MP willing to support a holiday tax. The majority of their voters oppose it, it will deter millions from holidaying in the UK and will hit the families the Government says it wants to help.”
“In his Spring Statement the Chancellor said that being able to pay for a holiday should never be too much to ask, but this tax is making holidays out of reach for many people. The people’s decision is clear and resolute: stop the holiday tax. Let’s continue to ease holidays, not tax them.”
Edinburgh Castle… Visitor tax will be imposed in some cities in Scotland this summer (Image: Getty)
Analysis by Oxford Economics found that a 5% holiday tax, the model introduced in Edinburgh in July 2026, would hit UK holidaymakers with a tax increase of £1.6bn. This will also shrink GDP by £2.2bn, cause 33,000 job losses and cause the Treasury to lose £688m in tax revenue by 2030.
In Scotland and Wales, all local authorities currently have the legal power to impose a visitor tax. While some Scottish cities introduced the tax this summer, the Welsh version of the tax will not come into force until 2027. Northern Ireland currently has no plans to introduce a tax.
In some parts of England the tax already exists as a tax that hospitality business groups in business improvement districts (BIDs) have agreed to add to invoices. A £1 per room visitor tax in Manchester has been in place since 2023 and raised £2.8 million in its first year.
Liverpool’s accommodation BID introduced a similar tax in 2025. Edinburgh will impose a 5% tax on hotel, hostel and holiday bookings from this summer. Major European cities such as Paris, Rome and Brussels already have their own versions of tourist taxes.
Shadow Chancellor Sir Mel Stride said: “Labor is never short of ideas when it comes to taxing you – and now they’ve set their sights on the Great British loophole. It’s not just a squeeze on household budgets, it’s a blow to jobs, businesses and local economies already under pressure. Rachel Reeves must repeal the holiday tax.”
The Treasury was contacted to get an opinion on the issue.
