A holiday tax in England would put an extra £100 or more on the cost of a fortnight’s stay, according to industry bosses.
A letter from industry bosses, coordinated by the trade body UKHospitality, has warned the chancellor that her plans would hit families hard, put jobs at risk and drain money from local communities.
In the autumn budget, Rachel Reeves confirmed that English regional mayors will have the powers to introduce visitor levies on overnight stays in hotels, Airbnbs and holiday lets.
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The aim is to give local mayors more funds to invest in local infrastructure and transport and mirror similar moves in Scotland and Wales.
But around 200 organisations, representing bosses of leading UK accommodation firms – including Butlin’s, Hilton and Travelodge – said in the letter that “holidays are for relaxing, not taxing”.
The letter read: “This ‘Holiday Tax’ will hit families hardest, puts jobs at risk, drain money from local businesses and communities and undermine the Government’s growth agenda.
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“For millions of hardworking families, a UK holiday is their chance to switch off and spend quality time together.
“For many, this tax will make their holiday unaffordable, meaning families will shorten trips, forgo a break altogether, reduce their spending with pubs, restaurants, events, leisure activities and local attractions, or travel overseas – spending their money and creating jobs elsewhere.”
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UKHospitality estimated a levy of £2 per person, per night, would mean a family of four paying £112 more for a fortnight’s break.
If the levy is based on a 5% charge, instead of a flat-rate, then the cost would be £100 for a family of four spending £2,000 on a 14-night break.
Visitors taxed in Scotland and Wales
This is in line with Edinburgh and Glasgow’s 5% visitor levy, which come into force in July 2026 and January 2027 respectively, while Aberdeen is to charge 7% from April 2027.
Meanwhile, Wales is allowing authorities to introduce a tax of up to £1.30 per person, per night from next April. There are no plans to introduce fees for visitors in Northern Ireland.
Manchester and Liverpool also operate levies, collected via accommodation providers, which are not technically tourist taxes but function in a similar way.
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The letter described the burden of rising energy costs, employment costs and business rates, which are due to rise in the coming months, although pubs have been given extra support.
It also said VAT is “double the rate of competitors in France, Italy, Spain or Portugal”.
A government spokesman 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.”
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