Holiday tax risks £2.2bn hit to UK economy – CLA joins call to scrap tax
CLA backs coalition warning that a visitor levy would damage rural businesses, reduce domestic tourism and, according to latest study, put up to 33,000 jobs at risk
The CLA has joined a coalition of more than 30 business, tourism and hospitality organisations urging the UK Government to abandon plans for an overnight visitor levy – known as the holiday tax.
In a joint letter to the Chancellor, the coalition warns that a holiday tax would increase the cost of domestic breaks, reduce visitor spending and damage businesses across the rural economy, including pubs, farm shops, attractions and accommodation providers.
Analysis by Oxford Economics suggests the policy could result in 33,000 fewer jobs and a £2.2bn hit to UK GDP.
The letter also highlights strong public opposition to the proposal, with polling showing 56% of people oppose a holiday tax, compared with just 24% who support it.
The coalition has called on ministers to focus on supporting growth in the visitor economy rather than introducing what it describes as an "economically and socially damaging" tax.
CLA President Gavin Lane said:
“A tourism levy sends entirely the wrong signal at a time when many rural businesses are already under significant financial pressure.
“Business taxes seem as incoherent as they have ever been.”
Increasing taxes via a visitor levy whilst at the same time reducing VAT on visitor attractions and business rates for pubs and clubs seems very poorly thought through and confusing
"The profit warnings from Greggs and Wetherspoons demonstrate that UK retail and hospitality is grappling with significant cost pressures, including 20% VAT, business rates and rising labour costs. This is compounded in rural areas with poor transport links, weak digital connectivity and restrictive planning rules.
“Rather than introducing new costs for visitors and businesses, policymakers should focus on creating the conditions for this vital sector to thrive.”