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Focus on simplicity for visitors levy in Wales, says ICAEW

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Published: 13 Dec 2022 Update History

ICAEW’s Tax Faculty responds to a Welsh Government consultation on the introduction of a tax on visitors staying overnight in commercial accommodation, calling for simplicity in design and administration.

The Welsh Government intends to give local authorities the power to levy a charge on visitors who stay in a wide range of accommodation. This includes hotels, self-catering accommodation, B&Bs and campsites.

Visitor accommodation providers would be responsible for the collection and payment of the levy to the tax authority (which could be a local authority or the Welsh Revenue Authority). The plan is to reinvest the revenues raised into local authority and tourism services.

ICAEW’s Tax Faculty has submitted a written response (published as ICAEW REP 96/22), focusing on questions regarding the design and administration of the levy.

In particular, ICAEW’s response highlights:

  • The challenges a tourism levy may present for accommodation providers against the backdrop of recent struggles in the tourism sector (ie, COVID-19, supply and staffing issue, inflation and high energy bills).
  • The importance of keeping the design of any future levy as simple as possible, so that it is easily understood by visitors and accommodation providers.
  • Concerns regarding the administrative burden that collecting, recording and paying over the levy may create for accommodation businesses, especially small providers.
  • Digitalisation of submission of returns and payment of tax should be prioritised and integrated with other systems as much as possible. Suitable alternatives must be put in place for digitally-excluded taxpayers from the outset.
  • The need to balance the revenues raised against the cost of implementing such a tax, through a detailed cost-benefit analysis.

Read the consultation.

 
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