Holiday accommodation businesses in Whitby fear they will be left picking up the bill if plans to impose a tourist tax in North Yorkshire are given the go-ahead.
Earlier this month, the office of David Skaith, the Mayor of York and North Yorkshire announced it was proposing a £1 a night visitor levy in the region using new legislation being progressed by the Ministry of Housing, Communities and Local Government.
The York and North Yorkshire Combined Authority (YNYCA) say the scheme , similar to ones running in European cities, such as Paris and Barcelona, and already in Edinburgh and Manchester in the UK, could raise £26m to be spent on infrastructure to support tourism in North Yorkshire.
However, with government documents suggesting it is the accommodation provider who pays the tax, Whitby’s B&B owners say they will be forced to put prices up as they now face paying a quarter of their takings in taxes.
Nicola Narey runs Storrbeck B&B on Crescent Avenue. She says tourist tax is a deceitful way of adding another tax on holiday businesses.
She told The Anchor: “My first thoughts are it is a tax on holiday accommodation. To call it tourist tax is duplicitous and makes it sound more welcoming than it is. People who visit should have to pay to support the town, but that is not what it going to happen.
“I fear we will be unpaid tax collectors. Calling it a tourist tax is mis-leading. It is a tax on the holiday business sector.”
Nicola doesn’t believe people will be put off coming to Whitby, as holiday accommodation providers will have to absorb the costs – but it is not a simple case of putting prices up to compensate.
She added: “People coming to Whitby won’t feel it. It will be people like me who have to decide where to absorb it. A big group which has multiple places or big hotels can pass it on.
“Putting the rates up is something we will have to consider but there is a ceiling. If you are just offering rooms and breakfast, there is a limit as to what you can charge, what’s reasonable and what is competitive. Accommodation in this country is extremely expensive.”
However, Simon Cotton, managing director of The Fat Badger Group which owns Whitby’s Royal Hotel, said even bigger accommodation provider will have issues.
The devil is in the detail he has said in a letter to The Anchor. Any levy needs to be an easy to implement and transparent system for collection, with any money generated in Whitby being invested back into the town rather than the wider North Yorkshire pot, he said.
Whitby could find itself priced out, he warned, if other nearby coastal towns opt not to impose a levy.
Simon Williams, from The Corra Lynn, said it will be a squeeze on income for him, and fellow B&B owners in the town, potentially putting his business over the VAT threshold if the levy goes beyond £1 a night.
He told The Anchor: “Like a few, we operate under the VAT threshold. If we have to administer an additional charge that puts us on the top line. I appreciate it is £1 per person, per night but will they bring in a levy to five per cent? It is not going to be £1 a night.
“If you look at the general footfall in town, it is lower than what it has historically been. My prime concern is what happens if we all put our prices up, somewhere along the line we will have to absorb some of that costs.”
Simon also questioned whether the £26m a tourist tax is estimated to raise is worth it.
He added: “There needs to be some justification of how the money will be used. The figure of £26m is a lot of money, but in the grand scheme of things, it is negligible. It will be millions to administer and a drop in the ocean for what will benefit the local area.”
Business owners say they had not been privy to any previous consultation and found out about plans via the press.
Phill Hesketh, and wife Sophie, run The Belfry in Church Square. They returned from holiday to read about the plans, which come after they were told earlier this year business rates would be increasing.
He said: “If it was a very small and limited tax, like £1 per night, and stayed local, I could support it. But, I have seen five per cent being bandied about and we are already paying 20 per cent VAT – another five per cent becomes a quarter of your takings, added to an increase in business rates.
“On its own it doesn’t sound like much but the combined total tax take on top of each other is getting too much.”
Proprietor at The Full English on John Street, Jack Beith said it was like getting water from a stone and couldn’t support the scheme without more details on how it would work.
Jack said: “I believe in Manchester they are charging £1 a night but will it be £1 plus VAT and other taxes, Until we know what and how, I am not happy about it.
“It is another tax on a tax on a tax – another way of getting water from a stone.”
Mayor David Skaith will continue to meet with the region’s tourism and hospitality groups as he develops plans for an overnight visitor levy over the coming months in partnership with York St John University and the Policy Lab, which prepared the Visitor Levy Policy report about introducing a tourist tax in North Yorkshire.
The report concludes by saying: “Evidence suggests that a modest, well designed visitor levy could be a viable policy option for York and North Yorkshire, and the case for proceeding to a structured feasibility and development phase is strong. The region has a substantial overnight visitor base, compelling investment needs, and an increasing political interest in exploring new funding mechanisms.
“However, this is contingent on careful policy design, strong stakeholder engagement, and the establishment of clear governance, delivery and evaluation mechanisms. The key policy question is not simply whether a visitor levy should be introduced, but how to design and implement one that commands stakeholder confidence, delivers demonstrable public value, and reflects the specific characteristics of this region.
“Based on the evidence assessed in this report, a flat-rate levy introduced at £1 per night, with a clear spending framework, transparent governance, and a built-in review mechanism, represents the most deliverable and credible starting point. This creates a foundation from which rates or structures can be refined as the evidence base develops, without the risks that come from attempting to design the definitive scheme before operational experience exists.”
The next steps are to undertake a formal feasibility study, engage with holiday accommodation businesses and providers and define how revenues would be used, as well as assess how collection would work.
