Dead in the water: Tory call for yacht tourism tax exemption sinks

Senedd Members torpedoed Conservative calls to exempt yachts and other boats from plans for a £1.30 a night tourism tax in Wales.

Sam Rowlands, the Tory shadow finance secretary, introduced an amendment to the tourism tax bill to remove powers for ministers to extend the levy to berths and moorings in future.

He argued extending the bill to marinas would be unnecessarily complicated and burdensome, adding that boating is a leisure and sporting activity.

He said: “To be clear, those that provide berths and moorings are not providing visitor accommodation in any real sense. By their nature, those vessels… move around.”

Mr Rowlands told Senedd Members: “It’s quite clear that boaters have a minimal… impact on local services because they are self-contained within the berth or mooring area.”

‘No case’

But Senedd Members voted 3-1 against the Conservative’s proposal as the finance committee considered nearly 160 amendments to the bill.

Mike Hedges, who represents Swansea East, said: “As I tell people quite regularly, we’ve got a marina there and I can tell you now – when people come in by boat into that marina, they don’t stay in the marina… they go into the city centre and they use the services there.”

Mr Hedges said: “The council taxpayer of Swansea is covering those costs,” as he argued marinas should have been included in the bill from the outset.

His Labour colleague Mark Drakeford agreed: “It is right that [for] a yacht arriving at Swansea or Cardiff marina… the yacht owner should pay the levy just as somebody staying in a nearby hotel or the Cardiff council campsite in Pontcanna will be.”

The First Minister-turned-finance secretary said: “I can see no case in principle why those visiting in boats and yachts should find themselves not captured by the levy.”

‘Complexity’

Prof Drakeford explained: “The bill, as the [Welsh] Government presents it, doesn’t have a worked-up scheme for berths and moorings as Mike Hedges would have wished.

“But the complexity of it is real and was beyond our ability to resolve all that complexity in the bill itself. So, what the bill provides is a power to return to this issue in future when some of those practical challenges can have been more fully discussed.”

Mr Rowlands responded: “It does feel like an afterthought… for me, without the proper revision and understanding of this in the first instance, it shouldn’t be in here at all.”

If the bill completes its passage through the Welsh Parliament, £1.30 a person before VAT could be charged on overnight stays in hotels, B&Bs and self-catering accommodation.

A lower rate of 80p would apply to hostels and campsites, with the 22 Welsh councils given powers to decide whether to introduce a local levy from 2027 at the earliest.

‘Progressive’

The committee also rejected Tory calls for a ten-night cap on the levy as well as exemptions for educational trips, charities, members of the armed forces and veterans. A Plaid Cymru amendment to exempt all under 16s was also defeated.

But Senedd Members were able to agree other amendments, including an exemption for under-18s from the lower rate, during the “stage-two” meeting on May 15.

Prof Drakeford described the Welsh Government’s approach as more progressive and targeted, removing a large proportion of educational stays from the levy.

He said: “If you’re going to narrow the [tax] base, the only way to compensate in terms of revenue… is by raising the levy charge on those who remain within the scope.”

Members voted to raise the lower and higher rates by 5p to 80p and £1.30 respectively.

The bill now moves to the third step: consideration of amendments by the whole Senedd: before a crunch vote on the final version at stage four.