Migrant hotels will be exempt from a new tourism tax in England, a decision that has ignited fury among hospitality industry insiders and opposition politicians. The Prime Minister recently granted regional mayors the authority to impose an unlimited 'overnight visitor levy' on stays in hotels, bed and breakfasts, and holiday lets across England.
This levy, intended to generate revenue for local areas, has drawn criticism for its potential economic impact. Business groups have warned that the tax, which Labour-run areas are likely to set at 5 percent, could put tens of thousands of jobs at risk and cost holidaymakers an estimated £1.6 billion. The Department for Housing, Communities and Local Government confirmed that taxpayer-funded migrant hotels would be excluded from the levy, classifying them as 'temporary accommodation'.
Conservative Party officials decried the exemption as 'utterly outrageous,' arguing that it unfairly burdens ordinary British families and struggling hospitality businesses while offering special treatment to hotels housing asylum seekers. Shadow Home Secretary Chris Philp stated that taxpayers should not be treated as a 'cash machine' and questioned why ordinary families should pay the tax while the asylum system is exempt.
Chris Philp also suggested that the exemption could incentivize hotels to prioritize accommodating asylum seekers over paying guests. The government is reportedly seeking to reduce reliance on hotels for asylum seekers, exploring options like privately rented accommodation and former military bases. Currently, 160 migrant hotels are in operation across the UK, with an additional 73,068 individuals housed in other taxpayer-funded accommodations.
Concerns have been raised about the broader economic consequences of the levy. Figures cited by UK Hospitality suggest that a 5 percent levy, if fully implemented by 2030, could lead to a significant reduction in Treasury tax receipts, a loss in direct investment from the tourism sector, fewer overnight stays, and substantial job losses. For a family spending £2,000 on a holiday, a 5 percent tax would add £100 to their cost. The levy is to be applied as a percentage of accommodation charges, excluding food and drink.
Critics argue that the tax contradicts the Prime Minister's stated focus on the cost of living and will further damage the hospitality industry, which has already faced challenges from previous tax increases and regulations. Trade bodies have expressed disappointment, with some noting that the uncapped percentage-based levy is more burdensome than capped fees in other European cities. The move follows similar, though generally smaller, visitor charges introduced in areas like Greater Manchester, Liverpool, Edinburgh, and Cardiff.
<![CDATA[IMAGE1]]>Migrant hotels will be exempt from Andy Burnham's tourist tax on hospitality after the Prime Minister was accused of raiding struggling Brits with an unlimited 'overnight visitor levy'
<![CDATA[IMAGE2]]>Pictured: The Bell Hotel, a former migrant hotel which was a the centre of anti-migrant protests last year
A Downing Street spokesperson emphasized that the policy is intended to empower local leaders and provide communities with more control over decisions affecting their areas. Communities Secretary Angela Rayner defended the move as an opportunity for areas to celebrate tourism and reinvest revenue locally.