Faarea MasudBusiness reporter
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Plans for a tax on people taking holidays in England should be scrapped, 200 hospitality and leisure bosses have urged.
The government is considering allowing mayors and other local leaders in England to introduce a “modest” tourist tax, or visitor levy, to raise revenue.
A version of the measure is already in place in some English cities, but it is something local businesses voluntarily add to bills rather than a local authority tax.
However, major holiday providers including Butlin’s, Hilton, Travelodge, and the owner of Alton Towers theme park have told the government its proposals would drain money from local businesses.
“Holidays are for relaxing, not taxing,” the groups wrote in a letter to Chancellor Rachel Reeves.
The businesses say people “would face an extra £100 or more for a two-week holiday” if a tax of £2 per person, per night was introduced.
“It could force families to shorten trips, skip travel altogether or head overseas, spending their money elsewhere,” they say.
The government’s preferred approach is for the tax to be calculated as a proportion of the cost of the accommodation being provided, as opposed to a flat rate, and it says local mayors “should consider the right level for their area.”
Its consultation on whether to give English local leaders the power to introduce the tax ends on 18 February.
In Scotland and Wales, all local authorities already have the legal power to apply a visitor levy.
Northern Ireland currently has no plans to introduce a levy.
“Mayors and other local leaders are best placed to identify and invest in the projects and infrastructure that drive growth and make a place attractive for visitors and residents,” he said at the time.
In some areas in England the tax already exists as a levy which groups of hospitality businesses in business improvement districts (BIDs) have agreed to add on to bills.
In Manchester, for example, the £1 per room visitor tax has been in place since 2023, and raised £2.8m in its first year.
The Manchester accommodation BID, a body representing 74 hotels and serviced apartments providers in the city, said cash raised from the charge had funded a campaign to boost stays during “traditionally lower occupancy months”.
Allen Simpson, chief executive of UKHospitality, said the UK already has high taxes, and the government proposals would make holidays even more expensive.
“We should be encouraging people to visit every part of our country – not taxing them for doing so. The government needs to scrap the holiday tax,” he said.
Starting in summer, Edinburgh will be charging a 5% levy on hotel, B&B and holidays bookings.
Aberdeen and Glasgow have also agreed to introduce a visitor levy, while several councils – including Orkney and Shetland – have rejected the idea.
Major tourist cities such as Paris, Rome and Brussels already have their own version of a tourist tax.
A UK government spokesperson said: “We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investment in the economy, supporting thriving communities.
“We expect any new charges to be modest and in line with other countries, and it is for Mayors to consider the right level for their area.”
But Conservative MP Andrew Griffith said businesses are already “on their knees” due to Labour’s “crippling hikes in business rates”.
“Their plans for a holiday tax will hit families and drive trade away from our towns and communities,” he added.
