by When Angela Rayner Rachel Reeves really asks to enable the nationwide tourist taxes, she will burn remaining bridges in peace with the British hospitality sector.
Look at the Firefights hotels, pubs, restaurants and visitor attractions.
The pandemic caught the industry. In one level, 1,650,000 employees in this sector were up to date when the companies hired the trade. The staff left the sector and the country; The Brexit had already reduced the availability of specialists.
Companies closed – and continue. In 2024 alone, 4,078 hospitals in Great Britain closed – according to the latest report by the Hospitality Market Monitor, an average of 11 closings per day.
The pub sector was particularly hard hit, and 412 pubs closed their doors in 2024 and brought the total number of pubs in England and Wales under 39,000 for the first time. Almost a third of all night clubs have closed since 2020, driven by rising costs, shift in consumer habits and restrictive license guidelines.
VAT for hospitality, which is 20 percent – is higher than on almost somewhere in Europe. Germany, for example, still has a special postcovid rate of 7 percent.
A YouGov study, which was commissioned by the UKHospitality and 700 companies that offer around 130,000 venues across the country, showed that 79 percent of the public for a reduced VAT for hospitality and tourism were in favor of a reduced VAT rate. Only 17 percent supported the storage of VAT at the current level.
According to activists, lower VAT claims that prices keep prices low, expand the selection, support venues and promote investments.
Other recent treasury decisions have also hammered tourism. In 2021, Rishi Sunak, who was then a Chancellor, scrapped the export system for VAT in Great Britain, which enabled visitors outside the EU to regain value creation tax for purchased goods.
According to Richard Toomer, Executive Director of the Tourism Alliance-one umbrella organization for more than 70 associations and bodies-it’s Great Britain “the only great European goal that does not offer this service that is an essential driver for many long-distance visitors.
Many tourists, as he claims, exchange London and Edinburgh with Paris and Milan or cut their British journey and save their expenses until they go to Europe. Returning the system and extending to EU citizens would possibly be worth 10 billion GBP per year and increase the tax revenue by 4 billion GBP per year.
Then there is air tax. The comparison of passengers in the countries can be terribly complex, but the Great Britain, which contribute between 7 and 224 GBP to the cost of each flight price from British soil, is generally viewed that they are among the highest in the world in the world (and will soon continue to rise).
This puts it in a clear contrast to some of the rapidly growing Asian economies that have controlled taxes on flights.
In addition, all foreign visitors in Great Britain have been awarded a surcharge for ETA – or approval for electronic journey since April 2025. The government argues that Great Britain, like many other nations, needs a recording of visitors to ensure border security.
It is not a large amount, but we should consider that visitors in the UK are already asked to do without bloated hotels, food, drink and transport.
The messaging is wrong, as a recently from Anholt-ISPOSS report on Nation Brands proves, in which the British “welcome” ranking in 19th place of 60 nations fell-the-the-way is low for this measure. Even Visitbritain – the Quango, who was commissioned to promote the image of the country abroad – has taken care that the “perceived welcome” is no longer positive.
The above measures that were taken together already contribute to a decline in the numbers.
According to the recent statistics of the United Nations’ world tourism organization, the number of visitors in Great Britain in 2023 was 5.6 percent and placed the country on the bottom of the European table – under France, Spain, Turkey, Greece, the Netherlands and Croatia, although it is better than Italy and Germany.
This means that Great Britain is exposed to a lack of 2.8 billion GBP in overseas. Projections for 2024 only indicate a slight improvement.
What would a local tourism tax do for the British economy?
The Pro Devolution County Councils Network claims that the introduction of a flat-rate tourist tax “would generate around 209 million GBP of additional income in County areas per year at a price of only 2 GBP per night”. The same organization forecast a deficit of 54 billion GBP for British councils in the next five years if local tax matters are not shaken.
But tourism tax, especially if it combines a newly shaped picture of a country that does not like visitor, would only have a minimal influence on increasing the income for local services.
The most splitting measures are often the most desperate. Rayner and their supporters can point out to European cities and argue that “all other money collects through tourism taxes” and that Wales will introduce accommodation in 2027 and already have Manchester and Liverpool one.
But a size rarely fits for everyone and the British tourism offer is a strange mix of large cities, national parks, rural villages and under -spoiled cities. Fat-Cat Tourism Honeypot London could easily survive an additional delivery, but what about Bradford?
Beating foreigners with a tax could sound appealing. Finally, vacation foreigners use an available income. However, a ceiling tax regime could ultimately lead to fewer visitors, job losses and wages for some of the lowest paid employees in the country.
The hospitality is the third largest employer in Great Britain with 3.5 million people in the industry. It plays a crucial role in providing jobs and supporting a living across the country. The sector contributes £ 93 billion to the economy and tax revenue of £ 54 billion.
The work was chosen with a manifestary promise to “kick economic growth”. Even a decrease of one percent of the income in connection with tourism would line the advantages of a thrashing tourist tax.
