Fury as Rachel Reeves plots to slam Brits with £518m UK ‘holiday tax’ | Politics | News
Holiday tax would cost Britons £518 million and mark “another shocking” U-turn by the Government, a leading trade body has warned. Reports suggest British holidaymakers will face paying a nightly tax on hotel and Airbnb-style accommodation under plans to be announced by Chancellor Rachel Reeves in the Budget.
UKHospitality, which represents hundreds of businesses across the UK, expressed concern over the reported plot. The trade body is calling on the Government to “stick to its word” and not introduce a holiday tax in the Budget on 26 November. The authority said a 5% tax, the rate set by Edinburgh last year, would correspond to an effective consumer tax of 27% on hotels if VAT was taken into account.
UKHospitality said the 5 per cent holiday tax would “cost the already cash-strapped public £518 million in additional tax”.
Reports of the new role come just weeks after then-tourism minister Sir Chris Bryant told MPs the Government had “no plans to introduce a tourism tax”.
UKHospitality Chair Kate Nicholls, who has called on Labor not to introduce the tax, said: “If this is true, it would be another shocking U-turn for a Government that just two months ago pledged in the House of Commons not to introduce a tourism tax and even promised the industry the same in writing.
“I know the government is concerned about the cost of living, but this holiday tax is little more than the high rate of VAT on holidaymakers. Brits undertake more than 89 million overnight trips in the UK, staying a total of 255 million nights.
“This is a bill we will all have to pay and will only serve to raise prices and increase inflation.
“At a time when Ireland has reduced its accommodation VAT to 9% and Germany currently has a VAT level of 7%, this will effectively increase our VAT rate to 27%.”
He added: “We need to get consumers to spend. But that will only mean more cuts for people and more job losses, on top of the huge damage from last year’s budget.”
“Hospitality cannot once again foot the bill for the rest of the economy.”
Accordingly TimesMs Reeves is set to give regional mayors new powers to impose a tourist tax.
It is said he hopes to raise hundreds of millions of pounds to be invested locally in utilities and transport.
The devolved governments in Scotland and Wales are also introducing the tax; government insiders claim that Britain is an outlier for not following suit.
