UKHospitality warns against tourist tax ahead of Edinburgh move

UKHospitality has reiterated its message that a tourist tax in Edinburgh, or any part of the UK, could be “disastrous for hotels and the hospitality sector”. The news follows Edinburgh’s council campaigning for the legal powers to introduce a levy and comments by City of Edinburgh Council leader Adam McVey on Twitter that a tax would be introduced in the city “in the next 12 months”. UKHospitality has reiterated its message that a tourist tax in Edinburgh, or any part of the UK, could be “disastrous for hotels and the hospitality sector”. The news follows Edinburgh’s council campaigning for the legal powers to introduce a levy and comments by City of Edinburgh Council leader Adam McVey on Twitter that a tax would be introduced in the city “in the next 12 months”. In the next 12months our plans for a “tourist tax” will be ready for implementation. While it may take longer to deliver the powers necessary to start collecting, our timeline is robust & we’ll be ready to go! https://t.co/Ic7RFfqjTu — Cllr Adam McVey (@adamrmcvey) July 4, 2018 UKHospitality chief executive Kate Nicholls said the tax would be “disastrous” and that “no tourist tax, in any part of Scotland or the rest of the UK, should even be considered without the full involvement of the hospitality sector”. She said: “Adam McVey has rather blithely announced on social media that a tourist tax would be introduced in the city within 12 months; yet there has been no meaningful consultation with the businesses at risk and no wider discussion with the national organisations representing the hospitality and tourism sector. “Hotels and hospitality businesses are already facing a mountain of costs and any additional tax, no matter the cost, would present vital employers with a significant barrier to growth and investment.” The UK is one of only three EU countries which does not have a reduced rate of VAT on hotel and tourism services - by comparison, the rate of VAT on hotel rooms in EU countries is about half of the 20% rate applied in the UK. In the majority of EU countries which have some form of tourist tax, there is a reduced rate of tourism VAT. Nicholls added: “The Scottish Government is rightly of the opinion that any such tax would be harmful to businesses in the country and we welcome Tourism Minister Fiona Hyslop’s assertion that no measure should or could be introduced without agreement from the Government and discussions with the hotel sector. “A full and wide-ranging consultation must first be carried out, in order to gauge the appetite of the sector and for policy-makers to identify the pros and cons of such a measure.” UKHospitality chief executive Kate Nicholls said the tax would be “disastrous” and that “no tourist tax, in any part of Scotland or the rest of the UK, should even be considered without the full involvement of the hospitality sector”. She said: “Adam McVey has rather blithely announced on social media that a tourist tax would be introduced in the city within 12 months; yet there has been no meaningful consultation with the businesses at risk and no wider discussion with the national organisations representing the hospitality and tourism sector. “Hotels and hospitality businesses are already facing a mountain of costs and any additional tax, no matter the cost, would present vital employers with a significant barrier to growth and investment.” The UK is one of only three EU countries which does not have a reduced rate of VAT on hotel and tourism services - by comparison, the rate of VAT on hotel rooms in EU countries is about half of the 20% rate applied in the UK. In the majority of EU countries which have some form of tourist tax, there is a reduced rate of tourism VAT. Nicholls added: “The Scottish Government is rightly of the opinion that any such tax would be harmful to businesses in the country and we welcome Tourism Minister Fiona Hyslop’s assertion that no measure should or could be introduced without agreement from the Government and discussions with the hotel sector. “A full and wide-ranging consultation must first be carried out, in order to gauge the appetite of the sector and for policy-makers to identify the pros and cons of such a measure.”