Industry warns against regional tourism taxes

The city is considering using a levy on hotels and B&Bs as a means to bolster its finances, with the council facing £37m in cuts over the next five years, a Conservative councillor told the BBC.

Similar plans to introduce a £1-£2 tax per night on hotel bills have been debated in Edinburgh​ over the last few years, but have met with opposition from tourism groups and local business owners.

‘Bed’ taxes are already used in Berlin, Paris and Barcelona, but campaigners have warned​ that adding an extra charge on top of the UK’s 20 per cent tourism VAT rate could damage the country’s competitiveness on an international scale.

Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers (ALMR) warned that an extra levy could be ‘hugely detrimental’ to local hotels and ‘undermine Bath’s economy’.

“Businesses in Bath already contribute enormously through business taxes and engage in voluntary partnership work to promote the city’s fantastic hospitality sector,” said Nicholls.

“The council may view the tax as a good way to increase revenue, but the effects on tourism spend in the city are far from certain.

“With this in mind, we are urging local authorities to avoid increasing cost burdens for businesses in their areas and introducing taxes which may have an unfavourable effect on their own tourism offering.”

The Government has previously opposed plans for local tourism taxes on the grounds that they would make the hospitality and tourism sector less competitive.

However, a council spokesperson confirmed that the issue was being discussed with the Government, but that no decision could be made without changes in legislation at a national level.

"Should the idea be taken forward in the future, then the council would carefully consider the opinions of local residents and businesses to help shape the scheme,” the council said.