Campaigners Warn Holiday Tax May Render Vacations ‘Unaffordable’ for Many
Campaigners are raising concerns that a proposed holiday tax in England could drastically increase vacation costs, making them unaffordable for many families. Industry leaders have estimated that this tax could add an extra £100 to the expense of a two-week holiday.
Impact of the Proposed Holiday Tax
A letter coordinated by UKHospitality has outlined the detrimental effects of the government’s plans. According to the trade body, this tax would not only burden families but also threaten jobs and undermine local economies.
The holiday tax would enable English regional mayors to impose visitor levies on accommodations, such as hotels, Airbnbs, and holiday rentals. The initiative is designed to boost local funding for infrastructure and transport, echoing similar policies in Scotland and Wales.
Concerns from Industry Leaders
- Approximately 200 organizations, including major companies like Butlin’s, Hilton, and Travelodge, signed the letter.
- The letter emphasizes that vacations should be about relaxation, not taxation.
- Families could respond to increased costs by shortening their trips or forgoing vacations altogether.
UKHospitality’s estimates indicate that a £2 nightly levy could cost a family of four an additional £112 over a two-week holiday. If calculated as a 5% charge on a £2,000 vacation, the increase would amount to around £100.
Comparisons with Other Regions
- Edinburgh and Glasgow will implement a 5% visitor levy starting in July 2026 and January 2027, respectively.
- Aberdeen plans a 7% charge beginning in April 2027.
- In Wales, authorities may introduce a tax up to £1.30 per person, per night from April 2024.
- Manchester and Liverpool have their own levies through accommodation providers, functioning similarly but not classified as tourist taxes.
Challenges Facing the Hospitality Sector
The letter from industry leaders also pointed out existing issues such as rising energy costs, increased employment expenses, and upcoming business rate hikes. Though some support has been given to pubs, the VAT rate remains significantly higher than in countries like France and Italy.
Government Response
In response to the backlash, a government spokesman stated that mayors would have the authority to utilize these funds for local needs and economic growth. They added that any new levies are expected to be moderate and comparable to those in other countries.
As the debate continues, many are left wondering how this potential holiday tax will reshape the landscape of domestic travel in England yet in the future.
