This briefing note looks at the process for introducing a tourism levy by using two pieces of analysis.
Tourism is a significant contributor to the UK Exchequer. Revenues are derived directly from tourist expenditure via taxes such as Air Passenger Duty and VAT, and indirectly from the effects of tourist expenditure on taxes such as corporation tax and income tax.
The idea of a local tourist levy in the UK has recently risen in prominence – Bath, Liverpool, Edinburgh, Birmingham and London have all raised the prospect of introducing one. With numerous cities across the world having a charge on tourist visitors, there are plenty of examples of how a tourist levy works in practice.
This briefing note looks at the process for introducing a tourism levy by using two pieces of analysis. The first lists the considerations that both local and national policymakers should contemplate when designing a tourist levy.
The second shows the results of a modelling exercise related to a tourist levy, which presents:
• an illustration of how much gross revenue local areas can expect to receive from the introduction of a tourist levy
• an illustration of how much net revenue local areas can expect to receive from the introduction of a tourist levy (in other words, whether it is worth a local area introducing a tourist levy or not).
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