Holiday let boss warns of 'tidal wave of destruction' for tourism industry amid tax plans

Richard Bond, the owner of Finest Retreats, said plans for a tourist tax and new rules around council tax could make many properties loss-making.

It comes after the Government confirmed regional mayors would be granted the power to introduce levies on overnight visitors. Chancellor John Healey is also reportedly considering taxing holiday lets as second homes rather than as businesses, which would add on additional costs by stripping them of business rates relief and moving them onto council tax.

Finest Retreats manages 950 properties across the UK including a dozen in Northumberland.

Mr Bond said: “This is a completely misguided approach that ignores how these properties actually operate. Each one is a mini business, employing local housekeepers and tradespeople, and with hundreds of thousands of employees in the sector.

“The economic contribution of holiday letting is significant, and overnight this will turn properties making small profits into loss-making businesses. The Treasury just does not realise how significant this would be for every one of them and the tidal wave of destruction it would create across the whole industry.

“There is already the distinction between holiday let businesses and empty second homes. There is no doubt this Labour government does not understand business and how economies work. On top of the tourist tax, it seems they are doing all they can to destroy coastal and rural economies.”

Junior Treasury Minister James Murray has confirmed the Government is reviewing “the tax treatment of short-term lets, such as self-catering accommodation”. He said “concerns have been raised” about second-home owners using small business rates relief to manage tax liabilities.

The final decision will not be made until the chancellor sets the budget later this autumn.

On plans for an overnight levy on visitors, a spokesman for the North East Mayoral Strategic Authority said: “No decision has been taken to introduce an Overnight Visitor Levy in the North East and no rate has been set as of yet.

“Our priority is to grow the visitor economy, support jobs and bring more visitors to the North East. Any levy would need to be modest, proportionate and designed with the sector, taking into account the needs of accommodation providers, including rural and coastal businesses.”

“Crucially, any revenue raised would stay in the North East and be reinvested into attracting visitors, support the delivery of more major events and strengthening the visitor economy, helping local businesses and communities benefit from increased tourism.”

“We are confident that any levy would be used to bring many more visitors to the North East and grow the number of tourism jobs here.”