Latest news with #hoteltax
Times
18 hours ago
- Business
- Times
Angela Rayner blocked from allowing councils to tax tourists
Angela Rayner pushed for councils to be given powers to tax tourists as part of the government's devolution agenda but was rebuffed by the Treasury. The deputy prime minister wanted to give directly elected mayors the ability to charge their own taxes on hotel stays as part of the government's Devolution Bill, published earlier this month. However, the move, first reported by The Daily Telegraph, was rebuffed by Rachel Reeves, the chancellor, amid fears that it could reduce revenues for businesses already struggling with higher national insurance taxes and rises in the minimum wage. A spokesman for Rayner's department did not deny the rift, saying only that there were 'currently no plans to introduce a tourism tax in England'. Many European cities, including Barcelona, Lisbon, Venice and Amsterdam, charge tourists a tax on the cost of hotel rooms and private rentals, either as a flat rate or percentage of the room charge. Cities in Scotland have their own tax-raising powers. Visitors to Edinburgh and Glasgow will pay 5 per cent on hotel stays from July next year and January 2027 respectively. Andy Burnham, the Labour mayor of Greater Manchester, is among the local leaders pushing to be allowed to charge more in England, while Sir Sadiq Khan, the London mayor, has suggested he would be open to a tourist tax in the capital that would provide more revenue for local projects. Last month, both mayors signed a joint letter with their counterparts in Liverpool, the North East, West Yorkshire and the West Midlands, calling for 'Barcelona-style' tourist tax. • The Sunday Times view: Business is an easy target for tax. Ministers should resist News of the disagreement over a tourism levy came as polling suggested the public would support a new tax regime to attract wealthy foreigners to the UK, provided they use private schools and private healthcare. In total, 67 per cent of people — and 69 per cent of Labour voters — supported special tax treatment for high net-worth investors, according to a report published on Tuesday. A majority of the population said they believed Britain should allow more of the world's wealthiest investors into the country, but only if they make a contribution to the economy and its public finances. Some 66 per cent thought part of that contract should be that foreign investors are banned from using the NHS or the state education system. The survey results were contained in a report jointly published by Onward, a think tank set up by the former Conservative MP Sir Simon Clarke, and the Adam Smith Institute, the free-market campaign group. Called The Prosperity Package, the report calls for a new tax regime for global investors to help stop the exodus of wealth from the UK. Britain is estimated to have lost a quarter of its billionaires over the past two years and is expected to lose a record 16,500 millionaires this year, according to research published over the past month. The acceleration in wealth migration since Labour came to power follows Reeves's decision to abolish the non-domiciled tax regime and apply inheritance tax to family businesses and farms. The old non-dom regime allowed wealthy foreigners who had lived in Britain for more than seven years to avoid paying UK taxes on their worldwide earnings in exchange for a fee starting at £30,000 a year. In its place, Labour introduced a new residence-based system that makes wealthy foreigners pay UK tax on their global earnings after living in the UK for four years, while their worldwide assets become subject to UK inheritance tax after ten years. • Surge in wealthy using insurance to beat inheritance tax hit The authors of The Prosperity Package report suggest an alternative that they believe would boost growth and increase tax revenue by attracting global investors to the UK. Under their scheme, wealthy foreigners would be allowed to move to the UK and keep their global assets, income and gains away from the taxman for 15 years in exchange for an annual fee of £300,000. In addition, applicants would be required to invest a minimum of £3 million into one of eight government-designated 'Industrial Strategy Sectors', delivering cash into areas such as clean energy, the life sciences, and digital technologies. Those who apply to the scheme would also have 'no recourse to public funds' and be required to take out private health insurance and educate their children in the private school system. When the proposed scheme was put to a representative sample of 2,000 Britons, it was supported by 53 per cent of respondents and opposed by only 15 per cent. • Non-dom crackdown 'could leave £4bn hole in public finances' The report says that modelling of the regime suggests that if implemented and taken up by 1,000 people, it would give a £30 billion boost to the economy after ten years and raise a cumulative £13 billion in extra tax revenues. The proposal has similarities to the previous Conservative government's Tier 1 investor visa scheme, which required applicants to invest a minimum of £2 million in either UK government bonds, British shares or loans to UK-registered companies. That scheme was abolished in 2022 after being criticised for being open to abuse by allowing foreigners with questionable sources of wealth to gain residency. The authors of The Prosperity Package report say their proposal would raise more tax revenue and they propose stricter checks on applicants. • Why the super-rich are leaving Britain Maxwell Marlow, of the Adam Smith Institute and author of the report, said: 'The public are clear — they want fairness, not a fortress. If the wealthy contribute significantly and don't draw on the state, most voters are open to their investment. Our proposal meets this test and puts Britain back in the race to attract global capital.' The plan has already attracted some cross-party support. Lord Mendelsohn, the Labour peer and the party's former business and trade spokesman in the House of Lords, said: 'I do not agree with some colleagues that we should wave goodbye to the wealthy; we should be doing whatever we can to welcome them back, and new investors, entrepreneurs, and high spenders to our shores. 'Crucially though, they must contribute to Britain, rather than just using it.'
Skift
7 days ago
- Business
- Skift
Chicago Bets on Hotel Tax to Stay Competitive
In a city where hotel taxes are among the highest in the nation, Chicago's tourism leaders say a 1.5% surcharge is the only way to stay in the game. Kristen Reynolds, just two months into her role as president and CEO of Choose Chicago, is focused on what she calls a critical priority. Establishing a Chicago Tourism Improvement District (CTID) to secure long-term funding. Brand USA's $80-million funding cut highlights the urgency. 'Sustainable funding is so important. We are one election away from people not understanding what we do, and need diversified and sustainable funding to protect us,' Reynolds said. The Chicago Tourism Improvement District would add a 1.5% surcharge to room rates at hotels with 100 rooms or more in a defined geographic area. That would bring Chicago's hotel tax — already 17.39% — to 18.89%, the highest among major U.S. convention destinations. 'We are close,' Reynolds said, noting that the Illinois Hotel & Lodging Association (IHLA) has been working on the initiative for two years. Proposed Hotel Surcharge Would Fund Marketing and Sales Roughly half of the funds would be used for international and domestic marketing; the remainder would support sales and bidding efforts. 'For nearly a decade, Choose Chicago has been lagging in international presence. Due to a state budget stalemate, international offices had to be closed,' said Michael Jacobson, president of the Illinois Hotel & Lodging Association. The plan is to re-establish these offices when the TID goes into effect. In addition, there will be a marketing push in the drive market. Incentives to Meet in Chicago The fund would also be used to cover bid fees and cash incentives — tools competing cities use to win large-scale events. 'For several years, we have heard from meeting planners who were offered cash incentives to bring citywides to certain destinations. We didn't have a budget for this,' Jacobson said. 'This will re-establish our competitive edge. We are not asking for city money or state money. We are asking the city to authorize us to go and collect assessments ourselves.' Bid fees alone can be a significant barrier. Entering the competition for the Democratic National Convention, for example, required a $1 million bid just to be considered. As high as Chicago's hotel tax may be, Jacobson said the key is to stay below 20%. 'We can't hit that number, as that is the danger zone,' said Jacobson. Support is encouraging, he said. 'A majority of hotel owners signed on in the last two months. We are confident we will see movement in the next couple of months and begin collection in January of next year,' he said. Chicago had 55.3 million visitors in 2024. A 6.5% increase from the prior year, according to ?Choose Chicago. Preliminary estimates indicate international visitation topped 2 million for the first time since 2019. A year-over-year increase of more than 10%. Choose Chicago booked 1,891 meetings and conventions in 2024.
