The Lyons Inquiry into Local Government Finance and the Bed Tax is causing some industry concern at the moment. We'd like to hear your views so we can forward them to Sir Michael.

Sir Michael Lyons has been given the task by Government through the Local Government Association of examining and making recommendations for the future financing of Local Government. As such the Lyons Inquiry, as it is known, is looking at every opportunity of raising funds to help pay for local democracy.

One of the considerations being made is the imposition of a tax on sleeping accommodation, a Bed Tax.

It is not the only consideration being made by Sir Michael Lyons for raising revenue for Local Government but it is (our) industry specific and added to other taxes already paid by accommodation providers, not least Value Added Tax at 17½ per cent, the second highest rate in Europe, it would seem to penalise one specific industry, unfairly.

I can see most commercial operators certainly those that pay VAT falling within the remit of any possible bed tax and as such they really should make their feelings known to Sir Michael.

www.Bandbowner.com have been invited to a meeting with Sir Michael to express the views of the smaller accommodation sector in the industry and we'd like your input on what you think we should say to Sir Michael Lyons.

So you are able to read what he has actually I have listed the paragraphs from Sir Michael Lyons's Inquiry into Local Government - Consultation Paper & Interim  below, which relate to his thoughts on a Tourism Tax.

Sir Michael Photo: Adrian Burrows

Sir Michael will be more interested in reasoned argument, not simply we should not pay, after all when has taxation ever been fair?

So points which show why the industry should not be targeted for more taxation will I think be better received than just 'why should we pay?'. Finally we will be bringing the results of the meeting back to these pages and although I don't think Sir Michael will tell us before Parliament what his decision will be we might just get an inkling on the day.

Taken from the:
Lyons Consultation Paper and Inquiry Report: Tourist-related taxes

2.98 It is not only the people who live and pay council tax in an area who benefit from local public services, and local prosperity and success are not dependent on local residents alone. In many areas of the country local economies depend on tourism and the contribution made by the visitor economy. Taxes on tourist activity have been suggested as a way of raising revenue for authorities, and ensuring that visitors contribute to the local public services they use.

2.99 I received submissions and took opinions on this subject from a variety of organisations representing the tourist industry, and from some local authorities, and discussed the issue during my regional events. Tourist taxes were also looked at by the Balance of Funding Review on the basis of a paper prepared by the Local Government Association. 2.100 The most frequent proposal was for a local tax on hotel and similar accommodation. Such local taxes operate in a number of other countries across the world, including various US states, Austria, the Netherlands and France. The tourist industry expressed a concern that a tax on accommodation would make England a more expensive and therefore less attractive destination for tourists, who might choose to go elsewhere or reduce the length of their visit. This might have adverse effects on the economy. They also pointed out the need to assess any possible distortionary effects and the compliance costs (particularly for small businesses), and noted that some other countries had hypothecated revenues in some way in order to make the tax more acceptable.

2.101 Some stakeholders suggested local sales taxes, which would raise revenue from tourists as well as residents, as an alternative. I also received research commissioned by the Association of London Government on the options for levying taxes on restaurants, entertainment venues and sporting events. Charging and trading powers are another means by which local authorities can raise revenue from tourist activities. Finally, one of the possible rationales for a tourist tax would be to ensure that tourists contributed to the costs they can impose on the local community and the environment. Road pricing schemes might have a role to play in addressing some of these concerns in National Parks and other rural areas where tourists are the primary cause of traffic related congestion and environmental damage. 2.102

I am interested in exploring this issue further, though I have noted that considerable further work would need to be undertaken if new forms of taxation were to be contemplated.