Tourism and Hotel Industry Representatives Say No to Proposed "Bed Tax"

Current plans to introduce a “Bed Tax” have been roundly criticized by the hotel and tourism industry. The plan is being proposed as part of a national Government tax review of local government funding and would see a 10% tax surcharge being levied per night on top of the already existing 17.5% VAT.

The plan follows on from a report last year for the Association of London Government, which represents 32 boroughs, which described the tax as, "an ideal minor tax in that it relates to a group that imposes clear costs on authorities but which presently contributes nothing directly towards those costs".

The current proposals, as they stand, could raise the cost of a short UK break by up to £100 for the average family. While the UK is already, throughout Europe, second only to Denmark in the severity of its taxation levels for tourism, the newly proposed tax would put Britain firmly above the Danes making it the highest taxed holiday destination in the EU, nearly three times the European average.

The idea which is presently under consideration by Sir Michael Lyons, who is tasked to review the plans for future local government financing, however the Liberal Democrats warned that implementing such a move could be "disastrous" for the entire £12bn UK tourism sector.

Liberal Democrat culture spokesman Don Foster told the BBC, "When you think that VAT on tourist-related activities in this country is 17.5 per cent, whereas in the rest of Europe it is 8.5 per cent and in countries like France 5.5 per cent, these tourists use services, but they are certainly already paying for them."