ENGLAND
Neither local authorities nor central government in England have the power to introduce a tourist tax, but Manchester and Liverpool city councils each launched one in April 2023 in through a legal workaround. They brought in tourism-based Business Improvement Districts (BID) which collect additional business rates payments from firms operating in specified areas.
Manchester introduced an ‘accommodation BID’ which is payable by hotels and serviced apartments with a rateable value of £75,000 or more, in an area within Manchester city centre and a small adjoining part of Salford. The levy is expected to raise up to £3.8million per year between 2023 and 2028 – and raised £2.8million in the first year.
In Liverpool, the BID levy covers the whole city and is payable for accommodation properties with a rateable value of £45,000 or more, with a cap of £50,000 per property. The levy is 1.6 per cent of a property’s rateable value, rising to 4.5 per cent in 2024/25 and 2025/26. It is expected to raise £939,000 per year in the latter two years.
In London, Mayor Sadiq Khan is now considering a tourist tax on the capital’s hotels, with his team looking at the evidence from other cities.
The UK’s first so-called coastal tourist tax across Bournemouth, Christchurch and Poole in Dorset was approved in May following a ballot of hoteliers. It would have required guests staying in larger hotels to pay an extra £2 per room, per night – but this was then put on hold in July following opposition from more than 40 hotels who lodged an appeal with the government over how the ballot was conducted. This week, it was revealed that the appeal was being considered by Housing Secretary Angela Rayner.
The tax has also previously been consider by councils in Birmingham, Bath, Cambridge, Cornwall and Thanet in Kent – but has not been implemented in any of those areas.
SCOTLAND
The Scottish Parliament passed the Visitor Levy (Scotland) Act 2024 in April, which gives local authorities the power to introduce a tourist tax.
Aberdeen City, Argyll and Bute, and Highland councils are also planning to consult on a levy.
WALES
Proposals for a tourist tax began going through the Welsh Parliament last month – but prompted fury from the Welsh Association of Visitor Attractions which urged its members to shut for one day in protest.
The bill will now be considered by the Senedd.
Read more:
The Introduction of a Visitor Levy in Scotland: A Burden on Small Businesses and Tourism