A NEW “holiday tax” will add £500million a year to the cost of UK breaks, business leaders warn.
Chancellor Rachel Reeves has been urged not to allow mayors the power to raise funds by slapping a levy on overnight stays at hotels, campsites and B&Bs.
The Confederation of British Industry said it will drive up inflation, hamper investment and mean more red tape.
Two hundred bosses from firms such as Butlin’s and Haven have written to Ms Reeves hitting out at the plans.
A consultation closed in February.
CBI head of tax policy Alice Jeffries said: “The Government should be sending a clear message that Britain is open for business and tourist visitors alike — not making it harder for people to spend their time and money here.”
She said the policy could apply a handbrake to investment, jeopardise jobs and squeeze margins for a sector facing one of the country’s heaviest tax burdens.
UK Hospitality say it could add £100 to a two-week family stay based on £2 per person per night.
Its boss, Allen Simpson said: “The Government should keep holidays relaxing, not taxing.”
A Government spokesman said: “The final design of the visitor levy has not been decided.
“We are clear it will ensure hugely popular areas benefit even more from tourism and mayors will have more money to invest in local priorities.”