Sir Sadiq Khan is introducing a tourist tax in the capital
The leader of Westminster City Council has demanded that London boroughs be given their “fair share” of any tourism tax imposed by the Mayor.
Councillor Paul Swaddle, who leads the Central London borough, has started a petition calling on the Mayor to commit to passing on least half of any revenue raised by an overnight levy to boroughs which are delivering services for tourists.
The campaign comes after Sir Sadiq Khan announced that he was planning to introduce a tourist tax in the capital, capped at 5 per cent of accommodation costs. The exact figure is had not yet been decided, reports the BBC.
Sir Sadiq has been a long-time supporter of introducing a tourist levy in the capital to support London’s economy.
His decision to push forward with plans comes after the Government handed greater powers to Mayors and local leaders, including the ability to introduce overnight levies.
Paul Swaddle, Leader of Westminster City Council, has previously stated that an overnight levy could increase the burden on London’s already struggling hospitality sector.
UK Government is cutting funding for Westminster, along with several other councils, as part of its Fairer Funding Review.
Westminster will see its financial support slashed by half over the next four years, meaning the council will receive £100 million less from the national Government.
The leader of the Central London borough has previously warned that there would be “precisely zero benefit to Westminster residents and businesses” if the Mayor does not share revenue raised with councils.
Cllr Swaddle said: “The reality about an overnight visitor levy is that in Europe, VAT is significantly lower and the total tax burden is lower. Our hotels across the West End and elsewhere in Westminster need to be competitive to keep us a global visitor attraction.
“However if the levy is to be raised, local authorities need to keep at least half to be spent locally for services that benefit visitors, such as keeping the streets clean and safe. The Mayor of London has no intention of sharing any overnight levy income with councils so there will be precisely zero benefit to Westminster residents and businesses.
“The cost of supporting the visitor and commuter economy in Westminster is an estimated £115m a year and that needs to be recognised. It’s important we now see the fine print of what is being proposed.”
Overnight levies explained
An overnight levy is a tax that accommodation providers pay to the local authority which is normally based on a percentage of the price of a room cost or a flat night rate. However the cost is almost always passed on to guests by hotels who pay a small amount extra to stay overnight in the country.
They are already in place in many major cities in Germany, the United States, Italy and the Netherlands. Some of these levies have caps on the number of nights they can be applied for. For example in Wales the levy is applied only to the first 31 nights of a tourist’s stay in the country.
Research suggests that a £1 a night levy in London could raise up to £91million a year for the capital, reports the BBC.
A spokesperson for the UK Government said: “Mayors will be empowered to deliver more long-term, locally led investment in transport, regeneration and cultural assets that can unlock growth and make places more attractive for residents, businesses and visitors.
“The Government will not compel any Mayor to introduce this levy, nor will Central Government reduce funding for Mayors if they decide to do so.”
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