This popular UK city is latest to introduce a ‘tourist tax’

Liverpool’s BID company has voted to charge £2 per night to its guests visiting the city from June

Liverpool will become the latest city in the UK to introduce a ‘tourist tax’ for visitors, charging £2 for overnight stays at hotels in the area.

Liverpool is known for its vibrant music past, with the likes of The Beatles and Cilla Black hailing from the city, as well as its maritime history and Premier League football clubs, but visitors will now have to pay a little extra to enjoy the sights.

Hoteliers voted to introduce a £2 per night charge to guests in the city in a ballot carried out by Accommodation BID, representing 83 hotels.

The organisation says that a £2 “city visitor charge”, to be rolled out from June, is projected to bring in £9.2m over two years, £6.7m of which will go towards supporting the city’s visitor economy through a subvention fund.

The new levy will be managed and administered by hotels and serviced accommodation, charged when guests check in or out.

For a levy to be introduced under government legislation, the organisation will require a clear and transparent business plan for the use of funds generated by the £2 overnight charge.

While Scotland has passed legislation permitting local authorities to levy ‘tourist taxes’ on accommodation, neither central nor local governments in England have the power to introduce tourist taxes at present.

Yet, in 2023, Manchester became the first city in England to introduce a form of tourism levy via a legal workaround, and Liverpool has now followed suit.

Manchester and Liverpool city councils both introduced a tourism-based Business Improvement District (BID) as of 1 April 2023, using existing legal power to establish a form of tourist tax.

Liverpool BID Company, which manages Accommodation BID, says its new £2 charge would not be a tourist tax or visitor levy, but a change to the existing BID levy through the Business Improvement District legislation.

Currency, the BID levy is paid by business rates of hotels, but the change will move this charge levied per occupied room/unit per night to be recouped from guests.

The company says the levy would support business conferences and destination marketing, and hopes it will bring major events to the city that generate overnight stays.

Bill Addy, CEO of Liverpool BID Company, said: “This £2 a night levy will be to help turbo charge Liverpool’s tourism and visitor economy, helping the city attract bigger events [that] bring people to the city.

“The circular visitor economy is one that becomes sustainable, in that it is able to invest towards the aspects it needs to make itself successful.

Mr Addy said that Liverpool has drawn inspiration from other cities around Europe to introduce the levy.

“We have always said that the industry should have their say on whether they want this levy to come in, as they are administering it,” he added.

“The evidence of other European cities suggests this model will translate overnight stays into major investment, so that we can convert that into world-leading and world-beating events.”

Marcus Magee, Chair of Liverpool’s Accommodation BID, also welcomed the outcome of the ballot.

“This is a major step in enabling the hospitality sector to have a say and an influence in regards to the city’s decision-making around the visitor economy, which is crucial to the vibrancy and economy of the city,” he said.

“The business improvement district structure allows for a clear and transparent approach to the use of investment”.

Councillor Harry Doyle, Liverpool City Council’s cabinet member for culture and visitor economy, said: “The ‘Yes’ vote for an extension of the BID to create a visitor charge is a great vote of confidence in the growth of our successful visitor economy. I want to thank all the businesses that participated in the ballot.

“Their positive support delivers a huge boost to Liverpool’s tourism sector and our major events programme, supporting jobs and investment to benefit local people, and showing how Liverpool continues to offer a warm welcome to visitors from around the world.

“This [is] a positive step and lays solid foundations in our endeavour to formalise the establishment of a sustainable tourism tax, akin to what is being looked at in Glasgow and has already been introduced in other major European cities, which would be used to further strengthen our tourism offer.”

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