LONDON, Sept. 10 (Xinhua) -- Britain's plan to allow mayors in England to impose a levy on paid overnight stays has this week sparked controversy, with supporters saying the tax would generate funds for local investment, while the hospitality industry has warned of higher holiday costs and potential job losses.
The British government on Thursday published its response to a 12-week consultation, confirming plans to give mayoral and foundation strategic authorities in England the option of introducing an Overnight Visitor Levy.
Under the government's framework, the levy would be calculated as a percentage of accommodation costs rather than as a fixed charge. It would apply to short-term commercial accommodation, including hotels, bed-and-breakfast establishments, guesthouses and holiday rentals.
Accommodation providers would be legally responsible for calculating, declaring and paying the levy to the relevant strategic authority through a self-assessment system. They would, however, be allowed to pass some or all of the cost on to guests through accommodation charges.
"This measure will give mayors the choice to raise and reinvest funding where it's needed most. It'll help support the local services, public spaces and attractions that both residents and visitors rely on, with decisions taken by people who know their area best," said Angela Rayner, secretary of state for housing, communities and local government.
London Mayor Sadiq Khan welcomed the proposal, saying that an appropriately designed levy could help the capital invest in tourism infrastructure.
"A well-designed, modest levy has the potential to provide an important additional source of funding to support growth," Khan said.
He said the revenue could be reinvested in infrastructure, culture and visitor experiences while helping London manage the pressures associated with receiving tens of millions of visitors each year.
The hospitality industry has strongly opposed the plan. UKHospitality, a trade body representing hotels, restaurants, pubs and other businesses, said the absence of a national cap could have a "genuinely catastrophic" effect on the sector by increasing costs for holidaymakers and adding administrative burdens for accommodation providers.
Modelling by Oxford Economics, commissioned by UKHospitality, estimated that a 5-percent levy applied across England could put 33,000 jobs at risk, increase holidaymakers' costs by 1.6 billion pounds (about 2.17 billion U.S. dollars) and reduce economic output by around 2.2 billion pounds.
"Give mayors one tax-raising power on one sector and they will pull that lever until it snaps," said UKHospitality Chief Executive Allen Simpson.
Simpson said accommodation businesses were already subject to Britain's standard 20-percent value-added tax, arguing that an additional levy could weaken the country's competitiveness and discourage families from taking domestic holidays.
UKHospitality called on the government to offset the potential impact by cutting VAT for hospitality businesses, reforming business rates and reducing employers' National Insurance contributions.
Similar visitor levies are being introduced elsewhere in Britain under separate devolved legislation. Edinburgh began charging a 5-percent levy on paid overnight accommodation in July, limited to the first five nights of a stay.
The government plans to introduce legislation during the current parliamentary session. Subject to parliamentary approval, local leaders are expected to be able to set out plans for investing the revenue by March 2028. ■