Despite a suggestion for taxes on UK tourism in the Lyon”s Inquiry (that looked into the future of local government funding), the government has decided against the introduction of a bed tax enforceable by local authorities.
British Hospitality Association (BHS) chief executive Bob Cotton was encouraged by the decision: ”For the last three years, we have consistently pointed out the difficulties of introducing a bed tax and emphasised how damaging it would be to the UK tourism economy. We are delighted that common sense has prevailed.
”Overseas and domestic visitors staying in the UK already have to pay one of the highest rates of VAT in the European Community, which puts the industry at a price disadvantage to competing countries. Raising additional sums of money through a tax on tourists, which will not be reinvested in the industry, would further damage UK competitiveness.”
If approved, only some local governments would have had the option to enforce the tax, which Cotton explained would cause great confusion: ”Some authorities might wish to introduce a tourist tax while others would not because of the potentially negative impact on their tourism revenue. Businesses in the area in which the tax was imposed would suffer, while those elsewhere would gain.”