Tourism tax is another turn-off for hard-hit travellers: Beckie Hart

Whether you plan to enjoy the surf in Cornwall or explore the hills and trails of the Dales and Moors, the last thing you want to find is an additional charge being lumped onto your bill.

But that’s the risk facing staycationers and overseas tourists alike if local authorities choose to use powers granted to them by the Overnight Stay Levy.

Collected by local authorities, this ‘tourist tax’ would add £500m a year to the cost of domestic holidays and make the UK a less competitive choice for both domestic and international visitors.

But it wouldn’t just be bad for holidaymakers, it would also be bad for businesses.

The move would heap new administrative burdens onto an industry already struggling after numerous external shocks, from the Covid-19 pandemic to labour shortages and sustained cost increases.

With tourism worth an estimated £147bn a year to the UK economy, any policy that risks dampening demand would “apply a handbrake” to investment and growth, put jobs in jeopardy, and squeeze margins for a sector already facing one of the heaviest tax burdens in the country.

Ask any hospitality firm in Yorkshire and they’ll tell you that they’re facing an uphill battle just to stay afloat.

Hit with a tax triple whammy of sharp rises to employment costs, business rates and corporation tax, some of our best loved businesses are having to make tough choices: whether to cut jobs, delay or abandon planned investments or even whether they can keep the doors open at all.

Tourism is undoubtedly one of the UK’s great strengths and certainly one of Yorkshire’s, attracting visitors from around the world to experience our landscapes, history and world-class attractions.

But its tax regime is fiercely uncompetitive.

It has Europe’s third highest hospitality VAT rate and no tax-free shopping for overseas visitors – unlike competitor destinations like France and Spain.

And Yorkshire wouldn’t just have to compete with other countries: Westminster is leaving it up to local authorities and mayors to decide whether to raise a tourist tax – with some regions already saying they don’t intend to.

We certainly don’t want to fall behind other regions as tourists choose to stay in regions where the tax doesn’t apply.

With local elections just days away, our message to local authorities and mayors is clear: you don’t have to follow where Westminster leads. Let’s drop the ‘tourist tax’ and help out some of our best loved local businesses – they need our support now more than ever.

What they don’t need is a regressive policy that makes it harder to spend Great British pounds in Great British businesses.

Beckie Hart is CBI regional director for Yorkshire and Humber