Brits are being taxed for the crime of going on holiday

New research from the TaxPayers’ Alliance estimates that British holidaymakers paid £4.8 billion in holiday taxes in 2024. This total alone would pay for a 1,200 year stay at the Four Seasons Walt Disney World Resort Grand Suite Room in Florida for a family of four.

For those heading abroad, the tax bill starts long before take off. Air Passenger Duty raised an estimated £1.2 billion from overseas holiday flights taken by UK residents last year.

VAT on pre holiday purchases, from suncream to flip-flops, generated another £1.7 billion. Add Insurance Premium Tax on travel insurance, and a family of four heading to Florida can face more than £300 in holiday related taxes.

But staying in Britain does not provide an escape from the taxman either. Domestic holidaymakers paid an estimated £1.7 billion in taxes through VAT on accommodation, food, shopping and entertainment, as well as fuel duty and VAT on travel. A family of four taking a week long self catering holiday in Cornwall could face more than £300 in taxes through VAT and fuel duties alone.

And now, some councils and mayors, championed by Andy Burnham and this Labour government, want to make the problem worse with overnight visitor levies. A flat £2.50 per person per night tourist tax could add almost £270 million a year to the burden on domestic holidays. For the average domestic holidaymaker, it would push the tax bill to £61, making a staycation more heavily taxed than a trip abroad.

This is blatant economic self-harm. Britain already ranks 113th out of 119 countries for tourism price competitiveness in the World Economic Forum index, and at a time when families are watching every penny, piling more taxes onto holidays will make breaks less affordable and hurt the seaside towns, hotels, pubs, restaurants and attractions that rely on visitors.

Supporters of tourist taxes claim they are small or painless, or that other countries have them. But that misses the point. For a family on a tight budget, every extra charge matters because a few pounds here and there can be the difference between booking a trip, shortening it, or staying at home altogether.

Ministers should be cutting holiday taxes, not inventing new ones. Air Passenger Duty should be reduced, overnight visitor levies should be scrapped, and families should be given some breathing space.

Holidays should not become a luxury reserved for those who can afford the tax bill.

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John O’Connell, chief executive of the TaxPayers’ Alliance

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