Ufi Ibrahim , Chief Executive of the BHA said : “ The BHA urges the Mayor to stop the madness of introducing a tourism levy . Gouging tourists does not fit with the idea that London is open for business . A tourism levy will harm already hard-press London hospitality businesses and discourage guests from staying overnight and reduce the amount they spend in the wider London economy .
“ Tourists in the UK already pay the most tax in Europe and the World Economic Forum currently ranks the UK 140 out of 141 countries in terms of tourism tax competitiveness . The UK ’ s rate of Tourism VAT is already twice the European average and , although some European countries have local tourism taxes , they all enjoy a lower rate of Tourism VAT so that any negative impact is offset .
“ The announcement is also extremely worrying as it provides sharing platforms , such as Airbnb , with an even greater advantage over hotels in the capital as visitors not only do not have to pay VAT on the cost of their stay but also would not have to pay his proposed tourism levy .”
RSM , the UK ’ s seventh largest firm of audit , tax and consulting services , warned that
hospitalitytoday . com | 5 a new tourism tax on visitors to London risks imposing an even greater burden on the UK ’ s hotel sector , already subject to the EU ’ s highest VAT .
Ian Bell of RSM said : “ The London proposal follows recent initiatives to introduce tourist taxes in other cities such as Edinburgh . If these proposals go ahead in the nations ’ capitals , you can well imagine that other UK cities will want to follow suit as a means of boosting council coffers .
“ Such a levy already operates in international cities such as Paris , Berlin , Rome and Amsterdam , but . . UK hotels have to charge VAT at the full rate , while most EU member states apply it at the reduced rate . Arguably , this already puts UK hotels at a competitive disadvantage .
“ In Ireland , the reduced VAT rate for the tourism industry has been so successful that it has been retained for at least a further year . Ireland introduced a reduced VAT rate of 9 % in 2011 and this has since been credited as creating an estimated 45,000 jobs . This year alone , Ireland has seen a year on year increase of 11 % in overseas visitors , and a 9 % increase in revenue for the same period .
“ Before the government looks at the tourism tax proposal , it should first consider why the UK is not making greater use of the reduced rate band for the UK hotel , hospitality and leisure sectors .”