Question to the HM Treasury:

To ask His Majesty's Government what consideration they have given to amending the rate of VAT on accommodation in the context of the proposed overnight visitor levy.

VAT is a broad-based tax on consumption, with a 20 per cent standard rate applying to most goods and services on the price paid. As such, if accommodation providers increase their prices in response to the levy, VAT will apply to the entirety of the higher price.

Local authorities wishing to introduce a visitor levy scheme have several flexibilities they can use, including the rate the levy is set at and discretion over which businesses are in scope.

VAT reliefs come at a cost to the Exchequer and have to represent value for money for taxpayers as a whole. The Government keeps all taxes under review and any decisions on tax policy are taken at the Autumn Budget.

The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK and has introduced new permanently lower business rates multipliers for eligible retail, hospitality and leisure properties. These new multipliers are worth nearly £1 billion per year and benefit over 750,000 properties.