Will a tourist tax harm Bath's hospitality sector?

12 January 2017

The City of Bath risks being labelled 'the tax city of the UK' if it goes ahead with plans to impose a tourist tax on overnight visitors, the Association of Licensed Multiple Retailers has warned.

Bath council faces £37m of cuts in the next five years, and Conservative councillor Charles Gerrish has indicated they are considering the tax as a way of generating extra revenue. It would be the first UK city to do so, though other European cities such as Rome, Amsterdam and Paris already tax visitors.

A £1 tax would add £12 to the cost of a three-night break in Bath for a family of four.

'At a time when businesses are facing tightening margins and increased property and wage costs, and when pubs already pay a third of turnover in taxes, any additional cost burdens could have a hugely detrimental effect on revenue streams for retailers and undermine Bath’s economy,' warned ALMR chief executive, Kate Nicholls.
'Businesses in Bath already contribute enormously through business taxes and engage in voluntary partnership work to promote the city’s fantastic hospitality sector.

'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. The Government's own response to the Lyons inquiry states that local tourist or bed taxes could make the UK's tourism and hospitality industries less competitive. 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.'
Bath would be the first city in the UK to impose the tax, with Edinburgh expected to follow suit.

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