The United Kingdom is considering a proposed ‘tourist tax’ for Aussie holidaymakers staying in campsites, hotels and Bed & Breakfasts.
British chancellor Rachel Reeves is eyeing the tax in a bid to raise an estimated $2billion to bolster the country’s coffers as economic growth falters.
Treasury officials are understood to have carried out ‘modelling exercises’ to see the economic benefit of introducing the tax.
The new scheme would start from roughly AUD$2-per-person at a campsite and increase as much as $30-per-person at a five-star hotel.
But both UK residents and holidaymakers from around the globe would have to pay the tax.
The ‘hotel tax’ would follow a tourist tax which was applied in France and the visitor levy proposed in Wales, which would be paid by visitors and collected by accommodation providers.
Chancellor Reeves refused to comment on the issue when asked by reporters on her current trade visit to China.
A spokesman for the British Treasury added: ‘We do no comment on tax speculation outside of fiscal events’.
The United Kingdom is considering a proposed ‘tourist tax’ for Aussie holidaymakers staying in campsites, hotels and B&Bs
The British government is considering a move to impose a ‘hotel tax’ on tourist, according to insiders
The government has hopes the tax could raise enough to support public spending, following increases in government borrowing costs in the UK.
The move has potential to raise about AUD$2billion a year, according to the TaxPayer’s Alliance.
One city in England already applies a tourist tax to overnight visitors.
In Manchester, the City Visitor Charge requires visitors to pay about AU$2 per room for each night of their stay.
In April 2024 officials revealed the tax had raised about AUD$5.5million in its first year.
The funds were spent on street cleaning and marketing campaigns for the city, spokesman Kumar Mishra said at the time.
British hotelier Sir Rocco Forte, one of the UK’s most prominent businessmen, warned the tax could damage the nation’s tourism industry.
‘Travel and tourism is one of the most vital parts of the UK’s economy, with the industry contributing over £250billion [AUD$495billion] a year to the UK’s GDP and supporting 3.5million jobs,’ he said.
‘Apart from the very smallest businesses, everyone trying to make a living in this area is being hit by the Government’s increase in employers’ National Insurance and the whole industry is suffering from the refusal to restore tax-free shopping for tourists.’
The measure would follow a previous tax slapped on visitors to the UK which meant tourists can no longer reclaim VAT – roughly equivalent to Australia’s GST – on their purchases.
‘This would be a pernicious new tax charged on top of all other taxes. The UK is already not a cheap destination, and this can only deter cost-conscious visitors who will increasingly choose to go elsewhere,’ he said.
The chancellor told reporters in China her budget is ‘non-negotiable’.
‘The fiscal rules that I set out in my budget in October are non-negotiable, and growth is the number one mission of this government to make our country better off,’ she said.
