Labour has announced a new tax!

[EvangelicalAboutButteredToast]

I know, I know, we’re all shocked.

In the King’s speech today. A new tourist tax that would be applied to overnight accommodation. It’s called the Overnight Visitor Levy Bill and could add around 5% onto hotel, B&B, guesthouse costs. They are pushing it through as we speak, I guess in time for summer.

@rentals the funds raised will largely be spent on the visitor economy (events and improving areas impacted by tourism for example) so therefore supports and boosts tourism whilst not putting the cost of doing this on local residents
does this help?

@AWeeCupOfTeaAndAnIndividualFruitTrifle that’s the point. If there is a push from any consultation to only apply the charge for overseas tourists then this would mean local visitors would have to prove they are local
cant have it both ways

Where is that money coming from? The tourist businesses. So you take a hotel that is operating at maybe 3 to 5% net margin. You deduct another 5% of it's income as an additional tax and they're now operating at between -2 to 0% margin. That business closes. That's the bigger picture. Businesses won't get an extra 5% income from the tax, people adjust. There will be an immediate downturn. A bit like when the stamp duty rates on the top end of the property market went up to raise more money. The actual stamp duty revenues decreased, because it affected sales.

I'm involved in the reporting process, so yes I am aware of it.

It's an interesting analysis unless of course you are running a hotel in which case it's a very stressful proposal.

Well its not agreed to be 5%
And you've ignored the margins increasing from demand going up due to the investment?

Won't be a problem when Starmer rolls out digital IDs for everyone.

Some places in the UK are already like that. DS said he got free admission to York Minster by showing his York City Council Tax bill.

Yes, I think that some people/authorities/companies don't always grasp that you can't just keep adding a few percent on here, a few percent on there, indefinitely; and that everybody can and will easily absorb it - especially when they get greedy and shove a big increase on in one go.

Also, as you say, when margins for a business are already only a few percent, what might sound like a small increase can wipe out any gain at all - so along with the small percentage of profit that disappears for the business owner, so too does all of the activity/jobs/facilities/opportunities that were funded and provided by the non-profit majority of that turnover.

As with a great many people, I'm sure, our council tax has gone up by 9%, gas and electricity by 15%, water rates pretty much doubled over the last couple of years. Food and most other things too. It's hurting a great deal. There eventually comes a point where a basic becomes a nice-to-have, then a very occasional luxury, and sometimes, something that you now just learn to completely live without.

Again
The funds will be spent mostly on the visitor economy
Increasing margins
Growth

@sleepwouldbenice thats a lovely idea but assumes that all things stay the same. Big hotels can absorb this, small ones are already scraping the barrel at month end to make payroll and many are already on outstanding VAT payments plans. I'm not convinced an extra tax payment to find at month end will boost growth and I am worried that for many it will be the final straw. I'm heavily into hospitality finances, it's not a happy story.

Look up the ABID operations in Liverpool and Manchester and what the funds have been spent on
I am not saying it will help every hotel in every area. But it does stimulate demand and growth

Especially if you are European like me! I was over recently before and after having specialist surgery unavailable in my own country and I found it very expensive. The only things cheap were meds like paracetamol so I stocked up on them😉.

Goodness. You haven’t even read what I said properly. I wasn’t even talking about the UK and you randomly started on about it…

Don’t know. But just saying it’s a possibility.

Ive visited plenty of places abroad where they have residents discounts for all manner of things so im guessing there would be various things that are accepted. Whether or not they decide to do that here is another thing of course and they may decide to charge us all!