Posted by Bishop Fleming on January 23, 2017
Bath could be the first city in the UK to impose a tourist tax, following news that Bath & North East Somerset Council is holding talks with the government over the introduction of a visitors' levy. Stephen Martin examines the implications.
Speaking to BBC Radio Bristol, Conservative councilor, Charles Gerrish, explained that the idea was being mooted to help offset £37m of cuts the council is facing in the coming years. The intention appears to be to charge a tax on overnight visitors to the city.
No other council in Britain currently imposes a tourist tax, so this would be a ground-breaking move.
Bishop Fleming understands that the matter is only at a ‘concept’ stage, and if this is to progress further would require a change in legislation.
The latest figures released by the Office for National Statistics (ONS) showed a 2% increase in overseas residents’ visits to the UK in the year to October 2016, compared to the same period the previous year.
This is positive news, given that the 2015 figures would have included visitors for the Rugby World Cup. However, the ONS reported that spending actually fell by 1%, despite the rise in visitors, which would suggest that tourists are being more cost-conscious.
If there is a trend of visitors cutting back on spending, then the introduction of a new tourist tax could make Bath a less attractive destination in future, when compared with ‘competitor’ cities like Oxford, York and Edinburgh that do not have the tax.
As well as being potentially trailblazing, the suggestion of increasing taxes on tourists is in contrast to recent to moves to cut taxes for tourist.
The ‘Cut Tourism VAT’ campaign has seen exponents lobbying to bring the rate of tourism VAT in the UK into line with mainland Europe. That campaign has gained momentum in recent months. It has been discussed in Westminster, and the Parliamentary Under-Secretary of State for the Department for Culture, Media and Sport has said that the department was ‘sympathetic’ towards cutting VAT on attractions and accommodation.
If a tourist tax is introduced, this would be an extra burden on the sector on top of the imminent Apprenticeship Levy, pension auto-enrolment and the National Living Wage.
Bishop Fleming is concerned that local business will suffer as a consequence, which would impact on Bath overall from the money it receives from tourism.
We would welcome any thoughts you have on whether the introduction of a tourist tax in Bath would have an impact your business.
Bishop Fleming has a wealth of experience working with family run and owner-managed businesses.