British Hospitality Association Strongly Opposes Tourist Tax

The British Hospitality Association remains strongly opposed to the introduction of any tourist or 'bed' tax which has been suggested as an additional source of local authority revenue.

“We believe that any suggestion of a tourist tax, on top of VAT which visitors already have to pay, is unfair in principle and poses huge difficulties in interpretation and collection,” says Bob Cotton, BHA's chief executive.

“Although no details are yet available with regard to the possible scope and scale of such a tax, the association believes that there are fundamental flaws in the argument supporting its introduction.”

The BHA argues that:

1. Overseas and domestic visitors staying in the UK already have to pay the second highest rate of VAT in the European Community, which puts the industry at a price disadvantage to competing countries. Raising additional sums of money through a tax on tourists, which will not be reinvested in the industry, will further damage UK competitiveness. It will also deter domestic demand. The tourist industry already contributes many billions of pounds to the Treasury in indirect taxes and duties.

2. The principle of imposing an additional tax on visitors who stay overnight in hotels discriminates against the hotel industry when other local services that visitors use, such as transport, retail outlets and other services escape penalty. This is fundamentally inequitable. Overnight visitors, through the hotels they stay in and the services they buy locally, make an even bigger contribution to local economies than day visitors, who will not be taxed. Hotels pay business rates and other charges, as well as supporting local services and businesses. To impose a tax on overnight visitors is thus highly discriminatory.

3. The association believes that the implications of a tourist tax have not been sufficiently considered. Hotels form only one part of the accommodation industry. Other providers include hostels, youth hostels, self-catering establishments, caravans and mobile homes, private houses offering lodging accommodation, as well as private houses hosting family and friends. It is discriminatory if the tax only covers hotel users; on the other hand, it will be impossible to collect the tax from some of these additional sources.

4. Given the size and complexity of the industry, it is likely that the cost of collecting the tax will exceed the revenue obtained, unless the tax is set at a high and even more damaging rate.

For further information:
Bob Cotton
0845 880 7744

Miles Quest
Wordsmith and Company
01753 645636

www.bha-online.org.uk