UK tourism tax could fund local projects

Now a new tourism tax in England could do more than make the hotel stays more expensive. Now the government is considering giving visual mayors the power to borrow against future income from the tax that effectively using money tourists are expected to pay in the future to help fund projects today. Now here's what it means for holiday makers and local economies. Now England is giving towards giving mayors and strategic local authorities the power to introduce an overnight visitor levy. It's often called a tourist tax and the charge would apply to stays in hotels and other short term accommodation. And importantly the tax would be paid by visitors including British tourists and not just foreigners. The government has proposed a percentage of the accommodation bill rather than a flat charge. For example at a 5 percent rate 150 pound hotel room would mean an additional 7.5 pounds on the room price. An independent analysis estimates that a 5 percent levy across England could raise around 603 million pounds a year. Although the actual amount would depend on how many local authorities introduce it and the rate they choose and how visitors will respond to it. And this is where the borrowing proposal comes in. Business Secretary Jonathan Reynolds has said mayors could be allowed to borrow against a future revenue stream from the visitor levy. In simple terms instead of waiting years to collect the tax a local authority could potentially use expected future payments as the basis for borrowing money now. And as for the projects such as transport public spaces or tourism infrastructure. Well for consumers that creates a tradeoff. The immediate impact is another cost on an overnight stay. But the stated aim is to use the money locally potentially improving transport streets cultural attractions and other things visitors and residents use that exact rate exemption and spending priorities will be decided locally. And the legislation establishing the system is still to come. So for travelers the key takeaway is that your hotel bill can't get a little higher while the money collected could be used to finance investment in the place you will be visiting.