UK Considers Tourist Tax That Could Double Caravan Holiday Costs

Plans for a new "overnight" tourist tax in England could potentially double the cost of caravan holidays, disproportionately affecting working families, according to reports.

The proposed levy, which could be set at £2 per night, is being considered by up to 10 of the 14 regional mayors in England as a way to generate revenue for local councils. Destinations such as Whitby, Bath, and York could be subject to this tax if approved. However, no area has officially announced a scheme, and the tax is still under consideration in Parliament.

Industry leaders have expressed concern that the tax, if implemented as a flat fee per person, could significantly increase holiday costs for lower-income families. Jon Hendry Pickup, chief executive of Butlins, warned that a £2 per person per night tax could represent a 66% increase on their lowest-priced breaks. He highlighted that for a family of four booking a £49, four-night term-time break, the additional tax could amount to £32, making the total cost over £80. Similarly, Simon Palethorpe, chief executive of Haven, noted that their cheapest four-day breaks, starting at £49, could increase to over £80 for a family of four due to the levy, representing a 65% rise.

The tax is expected to apply to a range of accommodations, including hotels, guesthouses, bed and breakfasts, campsites, self-catering properties, and short-term lets. Critics argue that a flat-fee system would impact budget holidays more severely than luxury stays, where the £2 per person per night charge would constitute a smaller fraction of the overall cost.

More than 200 hospitality and leisure chief executives have urged the government to reconsider the plans, anticipating that tourists may shorten trips, travel abroad, or forgo holidays altogether. They estimate that families could face an additional £100 for a two-week holiday.

The final design of the levy is still under discussion. Options being considered include a percentage-based model, similar to Amsterdam's 12.5% charge, or a flat-fee system. Accommodation providers would be liable for collecting and remitting the tax, rather than the customers directly.

While mayors are not obligated to implement the levy, several regions have indicated they are considering it. Only Hull and East Yorkshire, Tees Valley, West Midlands, and Greater Lincolnshire have ruled out the tax or remain undecided. A spokesperson for the Ministry of Housing, Communities & Local Government stated that the final design has not been decided and that the levy would enable local communities to benefit more from tourism and invest in local priorities. Wales and Scotland have already introduced or allowed councils to introduce similar holiday taxes.