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News - 12 March 2006
Dreaming might get more costly

New “Bed Tax” burden for Tourism Industry?

Tourism in Brighton & Hove supports 13,000 jobs and injects £380m into the local economy but the Chancellor might want to take a bite out of that sum to prop up the creaking council tax system.

A tax on tourism has been proposed in an Audit Commission report on the future of council tax. It is becoming increasingly apparent that the current system of raising money for local authority services, which has seen the council tax nearly double in ten years, is not sustainable – especially for the elderly on fixed incomes.

Consequently Sir Michael Lyons was tasked to review the system and come up with suggestions for how it could be improved. The result is a range of ideas from litter levies & congestion charging to returning uniform business rates (UBR) to Town Hall control. They also include a tax on tourism and hospitality that has been dubbed the “Bed Tax”. The exact details are not clear but the mere suggestion has been met with resistance from the industry including the Bed & Breakfast Association that represents some of the 20,000 or so registered B&Bs in the UK. The tax would take the form of a supplement on hotel rooms and it is widely used in America and some EU countries but it is unpopular in all of them both with the industry and tourists. In Italy it was introduced and withdrawn.

A figure of 10% tax on the cost of a room is being mooted but no official figure has been declared. Industry analysts estimate that this would add £100 onto the cost of a family holiday in the UK. The Lyons inquiry will not be published until the end of 2006. The Brighton & Hove Economic Partnership (BHEP) submitted evidence to the inquiry in 2005.

Read related items on:
Tourism, entertainment and hospitality
Audit Commission
Brighton & Hove Economic Partnership
Lyons, Sir Michael

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