“Bed Tax” threat looms again
by David Weston
Chief Executive of the
Bed & Breakfast Association
Sometimes a battle is seemingly won – only to need fighting again another day. This is the case with the infamous “Bed Tax” – that is, a tax on accommodation (including B&B stays).
Back in March 2007, just before Gordon Brown’s Budget, the ‘Lyons Inquiry’ report on local Government finance recommended introducing a power for local authorities to levy a tourism tax where there was a strong case to do so.
The Bed & Breakfast Association, the Tourism Alliance, BHA and others, vehemently protested about this threat to our businesses and to UK tourism and Government actually listened (it has been known). Local Government Minister Phil Woolas pronounced: “The Government does not intend to introduce a tourism tax.” We were delighted to have successfully fought the corner for B&Bs, and pleased to have won the battle on that issue.
That was then. Now in 2017, the Mayor of London, Sadiq Khan, has just announced that he will consider introducing a “tourism levy”. The old “Bed Tax” threat rises again from its grave, ten years on.
The UK already has virtually the highest tourism taxes of all our EU competitors, with VAT at 20% compared to 5% in many countries, the highest Air Passenger Duty in the world (which impacts inbound visitors), and one of the world’s highest rates of fuel duty (not to mention alcohol duties). Right now, many tourism and hospitality businesses – including many B&Bs and guest houses – are being hit with massive hikes in Business Rates (one of our small B&B members now faces a bill rising from zero to £3,000 – some 3% of total turnover).
The World Economic Forum, in its 2015 international tourism competitiveness survey, ranks the UK at 140th out of 141 countries in terms of tourism price competitiveness.
And there is already some evidence that overseas tourists are perceiving Brexit Britain (wrongly) as less welcoming. They have a choice where to go and spend their money.
Is this the moment to pile yet another new tax on those who come here to spend their money and help our balance of payments? We say: no it isn’t.
And “Bed Taxes” don’t work: in New York, a combined Tourism and sales Tax rate of 21.25% resulted in the convention industry halving in size within five years. They are unfairly targeted too: a bed tax on hotels and B&Bs would only target some 3.8% of the people visiting a destination, who would be penalised whilst day trippers, campers, self-caterers, Airbnb users and others would be subsidised at our expense.
And the 2015 Day Visitor Survey found that an overnight visitor spends £66 per day locally, whereas a day tripper spends just £35. So why discourage those who will get our economy moving?
Help support us as we fight this and other threats to the health of your business.
The Bed & Breakfast Association is the UK trade association for B&B and guest house owners, and exists to inform, support & represent owners. Membership costs £60 a year.