Tourists don’t pay their way?

The permanent population of Devon is just over 1 million people of all ages.

The population of Devon increased by 14% due to the presence of tourists. In other words: taking the annual figures and averaging them over the year there are 140,000 visitors in Devon each day. Of course, this is actually much higher in summer and lower in winter.

They spent just over £1 billion on shopping, eating out and entertainment. They spent a further £0.8 billion on accommodation and travel (including petrol). Roughly half of the accommodation costs and an indeterminable amount of the travel (including petrol bought here) would have VAT charged on it. Small accommodation providers are not likely to be VAT registered. In fact, for the purposes of the arguments here, I have assumed that only 10% of the last figure had VAT charged on it.

So...broadly speaking, 14% of the population of Devon paid nothing towards costs of services they enjoyed. They did in fact pay something between £175 and £200 million in VAT. All that VAT goes to central government which can choose whether or not to dish any of it back. Meanwhile residents and businesses in Devon pay for their use of services.

Now, of course, the tourists pay the businesses they use and the businesses pay council tax and rates but the question I ask is: do tourists pay their way?

The information here, using Devon as an example, is taken from research by South West Tourism.

Many thanks to Paul Haydon of South West Tourism for help in creating justifiable ballpark figures from his own statistical analysis. Neither Paul Haydon nor South West Tourism necessarily endorse any of the views expressed in this website - they were merely a source of statistics.

The case, or not
for local VAT