Welsh councils may add to tourist taxes from 2027. This surprises tourism leaders who fear the impact on prices and visitors.
The basic tax is £1.25 per night. Hotels, B&Bs, and rentals will charge this, while hostels and campsites pay 75p. Councils decide if they want the tax; however, they haven’t said how much extra they can add. Welsh ministers will decide the limit.
The Wales Tourism Alliance (WTA) has concerns, especially as VAT-registered businesses will add VAT. This makes the tax £1.50 or 90p. The WTA worries extra fees will hurt tourism, fearing it will create unfair charges.
The extra tax idea was in a bill last November. Councils can add an amount to the tax rate, but Welsh ministers can set the highest extra amount.
This news surprised many tourism businesses. The government is working on the details, and they prefer a fixed extra amount each year. This would be an amount all local councils could use.
Mark Drakeford is open to Scotland’s tax system, which lets councils charge different amounts. They can vary by area and time of year, and Cardiff supports this for events like concerts.
Edinburgh will be Scotland’s first “tourist tax city,” adding a 5% tax from July 2026. This could generate £50 million per year. Drakeford wants a simpler system to ease the burden on providers.
Rowland Rees-Evans is against any extra tax, calling the tax unfair to poorer families. A family of six faces a £6.60 nightly tax already, including VAT.
A 100% extra charge doubles the tax to £13.20. Consequently, people may not afford to stay in Wales then and might pick somewhere else in Britain.
Rees-Evans raises concerns about different rates across Wales. Some areas might not introduce the tax at all, but others could charge extra fees. This could confuse visitors and providers.
The next stage of the bill will refine the extra tax rules. Drakeford wants strong rules for introducing them, deciding who gets to decide.
Drakeford wants to hear arguments about taxing children. Some call it a “tax on babies.” Many want other groups excluded too, including schools and charities. Not everyone can be excluded.
Excluding those under 16 would reduce tax money, falling from £33.3 million to £21.3 million. This lowers the tax’s benefits for councils, and they would need to find another way to get that money.
Excluding children could raise the tax to £2 per night for hotels, B&Bs, and rentals. Hostels and campsites would pay £1.
The government prefers a simple system, worrying about providers checking ages. Drakeford states children already pay taxes, citing kids buying sweets and paying VAT.
Rees-Evans disagrees with the government stance, saying children’s clothes and books have no VAT. He says other countries exclude those under 18.
Many people in Wales are not aware of the tax. It applies to anyone staying overnight, affecting kids on trips and people working away. Rees-Evans said people assume they won’t pay since they live in Wales.
He concluded the tax will cost Welsh people money and jobs.