Top News

Rachel Reeves is coming under mounting pressure to scrap plans for a tax on people taking holidays in England. Leisure bosses and MPs have urged the Chancellor to ditch the "Holiday Tax" as Britain comes under the grip of a major cost of living crisis.

The government is considering allowing mayors and other local leaders in England to introduce a visitor levy to raise revenue. Such a move could add more than £100 to the cost of a two-week break.

A version of the measure is already in place in some English cities, but it is something local businesses voluntarily add to bills rather than a local authority tax. However, major holiday providers including Butlin's, Hilton, Travelodge, and the owner of Alton Towers theme park have told the government its proposals would drain money from local businesses.

New polling today (Mon) shows that public opinion against the move is growing with more than twice as many people opposing it (56%) compared to those who support it (24%). The UKHospitality survey also finds that voters are nearly 10 times more likely to vote against an MP who backs the tax, threatening Labour's majority in 200 seats.

Modelling shows a majority of people oppose the tax in 574 of 632 UK constituencies. Meanwhile, almost three-quarters of people (73%) say a tourist levy would stop them holidaying in England, reduce the number of trips they take, or reduce how much they can spend while on trips.

Some 39% said they would be more likely to holiday abroad instead, rising to 48% among the highest-income households.

Allen Simpson, Chief Executive of UKHospitality, said: "This polling should be a wake-up call for every MP tempted to back the holiday tax. It is opposed by a majority of their constituents, it would deter millions from holidaying in England, and it would hit the very families the Government says it wants to help.

"In her Spring Statement, the Chancellor said being able to pay for a holiday should never be too much to ask, but this tax puts a holiday out of reach for many. The public's verdict is clear and decisive: stop the holiday tax. Let's keep holidays relaxing, not taxing."

Analysis by Oxford Economics has found that a 5% holiday tax - the model being introduced in Edinburgh in July 2026 - would hit holidaymakers in England with a £1.6 billion tax rise. It would also shrink GDP by £2.2 billion, cost 33,000 jobs, and leave the Treasury £688 million worse off in lost tax receipts by 2030.

In Scotland and Wales, all local authorities already have the legal power to apply a visitor levy. Some Scottish cities are set to introduce it this summer while any Welsh version of the tax won't come in place until 2027. Northern Ireland currently has no plans to introduce a levy.

In some areas in England the tax already exists as a levy which groups of hospitality businesses in business improvement districts (BIDs) have agreed to add on to bills. In Manchester, the £1 per room visitor tax has been in place since 2023, and raised £2.8million in its first year.

Liverpool's accommodation BID introduced a similar levy in 2025. Starting this summer, Edinburgh will be charging a 5% levy on hotel, B&B and holidays bookings. Major European cities such as Paris, Rome and Brussels already have their own version of a tourist tax.

Shadow Chancellor Sir Mel Stride said: "Labour are never short of ideas when it comes to taxing you - and now they have set their sights on the Great British getaway. This isn't just a squeeze on household budgets, it's a blow to jobs, businesses and local economies already under pressure. Rachel Reeves must axe the holiday tax."

The Treasury has been approached for a comment.