Gordon Brown forced to ditch new holiday tax

Labour’s plans to hike taxes on holiday lettings stopped – for the moment

I have always been one for the “staycation” rather that spending two weeks in the sun trying not to get burnt. Saturday I was looking at a mobile home to purchase and maybe use for letting when I wasn’t using it.
This would have been pointless if the proposed tax on tourism and furnished holiday letting had gone ahead. I am pleased to welcome the news that a determined stand by Conservatives has forced Gordon Brown to back down over a planned tax hike on local tourism.
Labour Ministers had been planning to scrap the tax relief on furnished holiday lettings. The result would have been a massive tax hike on the tourism industry and self-catering accommodation across towns such as Ramsgate and Margate. According to the Tourism Alliance, the proposed tax rises would have damaged 120,000 businesses, led to the loss of 4,500 jobs and cost the economy as a whole £200 million.
Conservatives forced the Labour Government to drop these proposals as a condition of Ministers rushing their Finance Bill through Parliament before the general election. But the Labour Party has said it will seek to re-introduce this tax rise if Gordon Brown remains in office after the general election.
The Federation of Small Businesses has warned that the Government’s proposals could leave eight in ten small businesses in the holiday sector at risk of closure. A poll of 166 FSB members that run self-catering accommodation found that more than half (52 per cent) said that they would have to make staff redundant if the tax rules were changed, and 81 per cent said changing the rules on their tax status would affect their financial viability. Another 43 per cent said the tax rules would put them off expanding their business and eight in ten said they would not be able take on any new staff (Federation of Small Businesses Press Release, 25 November 2009).

Well the nation will soon be deciding who governs the country.