Hotel owners to face FOURTEEN years in prison for evading Angela Rayner’s new levy

The overnight visitor levy will allow local leaders, including mayors, to impose an additional charge on hotels, bed and breakfasts and holiday lets.

The tax will be charged as a percentage of the nightly cost of accommodation and will affect domestic holidaymakers and business travellers as well as foreign tourists.

Ministers say the measures will allow devolved leaders in England to raise revenues to reinvest back into their local areas and mirror similar levies already seen in Scotland and Wales.

However, the Government has been warned by hospitality leaders the levy could put further strain on an already struggling industry.

The terms of the legislation have set out a maximum of 14 years imprisonment for accommodation providers who try to fraudulently evade paying the tax.

It also establishes hoteliers can also be jailed or fined if they falsely claim they are exempt from the tax or knowingly demand a fraudulent repayment.

Although it will be down to devolved leaders decide the rate of the tax, Labour metro mayors previously said a five per cent ceiling on the levy would be “reasonable” while still allowing them to raise money for their regional coffers.

Conservative and Reform UK mayors, however, have rejected the prospect of introducing the charge in their areas.

In the Commons on Wednesday, Ms Rayner introduced the Bill for its first reading.

The Communities Secretary said: “Every pound raised through these levies will stay in the local area. Whether that’s better transport, thriving high streets, or more attractions that keep visitors coming back.

“This is about giving mayors and local leaders the choice to invest back into what matters most to local people, while protecting lower-cost stays and making sure businesses have their say.”

Shadow Housing Secretary Katie Lam branded the possible penalty for evading accommodation providers “staggering”.

She told The Times: “Not content with taxing people on their well-deserved breaks, this Labour government appears to be attempting to outlaw bargains under rules which would see accommodation providers offering discounted rates forced to apply the levy at market rate.

“And the threat of prison sentences of up to 14 years for non-compliance is a staggering response to what could become a bureaucratic minefield for businesses.

“The fact this bill has been published without an impact assessment speaks volumes to the lack of thought that has gone into this policy and Labour’s complete lack of common sense.

“We should be making it easier and cheaper for people to enjoy a domestic holiday, not piling on costs, complexity, and the threat of criminal charges.”

Ms Lam added: “A Conservative government would cut business rates for hospitality and leisure businesses — protecting jobs and keeping the Great British holiday within reach for everyone.”

A spokesman for the Ministry of Housing, Communities and Local Government insisted those who make “minor mistakes” under the policy will not see the inside of the prison cell.

They said: “The provisions for enforcement measures in the Visitor Levy Bill are in line with precedent, and are a standard approach already in place, for example, for the evasion of VAT.

“We would expect this to happen in a very limited number of situations.”

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