Visitor Levy for visitor accommodation providers: technical guidance - Calculating the amount of levy payable

The amount of Visitor Levy arising on an overnight stay is based on the number of nights that visitors are entitled to stay under a contract.

Visitor accommodation providers will need to calculate the liability for each overnight stay, with the liability arising when the contract with the visitor ends and they no longer have an entitlement to reside at the premises.

The amount of levy for an overnight stay is calculated by:

• first determining the number of leviable nights, and
• multiplying the total number of leviable nights by the levy rate that applies in relation to the accommodation where the overnight stay takes place

To determine the leviable nights, you must first look at how many people were entitled under the contract to have an overnight stay at the accommodation.

Only one person entitled to stay

If there was only one person entitled under the contract to reside overnight in or at the accommodation, then the total number of leviable nights is the same as the number of nights the person was entitled to stay under the contract.

For example, Bert books a room at a hotel for himself and stays for 6 nights. As the contract for the room is for one person, Bert, and he was entitled to stay for 6 nights, the number of leviable nights is 6.

More than one person entitled to stay

If more than one person was entitled under the contract to reside overnight in or at the accommodation, then the total number of leviable nights is determined by:

• calculating the number of nights each person under the contract was entitled to stay overnight, and
• adding the numbers together

For example, Richard and Susan booked to stay in a cottage for 5 nights. To determine the number of leviable nights:

• Richard was entitled to stay for 5 nights
• Susan was entitled to stay for 5 nights
• adding these together, the total leviable nights is 10

A person aged under 18 on the first night that they are entitled to stay in or at visitor accommodation where the lower rate of the levy applies, should be disregarded when calculating the amount of levy payable in respect of that contract.

So, their entitlement to reside is not counted when calculating the amount of levy, or any nights they were entitled to stay do not count as a leviable night.

When someone turns 18 during their stay in or at visitor accommodation where the lower rate of the levy applies, they will continue to be disregarded for the purposes of calculating the amount of levy payable for that contract.

Example 1

Amy has booked a pitch for her tent and will be camping for 7 days in an area where the levy applies. As she is staying in a tent, the lower rate of the levy applies.

To calculate the levy payable for his overnight stay:

1. determine the leviable nights, which is 7
2. multiply the leviable nights by the rate, 7 × £0.75 which is £5.25

The total levy payable in respect of Amy’s stay is £5.25.

Example 2

A family of 5, comprising 2 adults and 3 children, book a camping trip for 3 nights in an area where the levy applies. The 3 children are all under 18 years old. As they are staying in a tent, the lower rate of the levy applies.

To calculate the levy payable for the overnight stay:

1. determine the leviable nights, which is 6 (this is calculated by adding up the number of nights each parent is entitled to stay overnight, and the children are disregarded for the calculation as they are under 18 years old)
2. multiply the leviable nights by the rate, 6 × £0.75 which is £4.50

The total levy payable in respect of the family’s stay is £4.50.

Example 1

Zachary books to stay in a glamping pod for 4 nights in an area where Visitor Levy applies. The higher rate of the levy applies in relation to glamping pods.

To calculate the levy payable for the overnight stay:

1. determine the leviable nights, which is 4
2. multiply the leviable nights by the rate, 4 × £1.30 which is £5.20

The total levy payable in respect of Andy’s entitlement to stay is £5.20.

Example 2

Jeremy, Karen and their son, Gary, book a chalet to stay in for 10 days in an area where Visitor Levy applies. The higher rate of the levy applies in relation to chalets.

To calculate the levy payable for the overnight stay:

1. determine the leviable nights, which is 30 (this is calculated by adding up the number of nights Jeremy, Karen and Gary are each entitled to stay overnight)
2. multiply the leviable nights by the rate, 30 × £1.30 which is £39.00

The total levy payable in respect of Jeremy’s entitlement to stay is £39.00.

Where a contract is made and allows:

• at least one person to stay in or at visitor accommodation to which the higher rate applies, and
• at least one person to stay in or at visitor accommodation to which the lower rate applies

Then the amount of levy payable is calculated by:

1. carrying out the levy calculation in respect of the higher rate visitor accommodation only, then
2. carrying out the levy calculation in respect of the lower rate visitor accommodation only
3. adding these two amounts together

Example

Penny, Ophelia and Florence book a trip to a holiday park that offers different accommodation types, including lodges and pitches for tents. Whilst they book their visit under one contract, Penny will be pitching a tent on the camping part of the visitor accommodation for 4 nights, while Ophelia and Florence stay in a lodge for 4 nights.

To calculate the levy due we:

• first consider Ophelia and Florence who are staying in visitor accommodation at the higher rate
• the total leviable nights is 8, as each of them is entitled to stay for 4 nights
• the total levy payable in relation to the lodge is 8 × £1.30 which is £10.40
• then consider Penny who is camping in a tent
• as she is the only one staying in the tent, the leviable nights is 4
• the total levy payable in relation to the tent is 4 × £0.75 which is £3.00
• adding £10.40 and £3.00 together, the total levy payable is £13.40

When it comes to completing Visitor Levy return, whether the visitor accommodation provider files on a quarterly or annual basis, they will need to:

• have calculated the levy payable per contract
• add these amounts together to understand the amount they need to self-assess in their return

Example

Marge uses her annex for visitor accommodation, let people book it for short term stays. She files her returns on a quarterly basis for Visitor Levy. Over the last quarter, she has had 5 different parties visit for overnight stays, and has calculated the levy payable per contract as:

• booking 1: £15.60
• booking 2: £23.40
• booking 3: £6.50
• booking 4: £33.80
• booking 5: £54.60

Her total levy payable for this quarter is the amounts for each overnight stay added together, which is £133.90.

Late arrival

Where visitors arrive a day or more late to the visitor accommodation premises they have contracted to stay at, the levy payable under the contract will be based on the entitlement under the contract, notwithstanding that the visitors will actually stay for a shorter period of time.

This is because the amount of levy payable is determined by looking at the entitlement under the contract. If visitors turn up late, the entitlement under the contract will not have changed, but they will have lost out on one or more days of their visit.

Where the visitor accommodation provider does vary or amend the contract to reflect the late arrival, then the amount of liability for the levy would need to take into account the updated contract.

Example

Nina and her 3 friends are touring Wales. They book a lodge in a leviable area and plan to arrive on a Monday and stay for 7 nights. When they book, they state 4 adults will be staying in the lodge. Bertha and her 3 friends end up getting delayed, and do not show up until Tuesday. They then stay the remainder of the stay at the campsite.

As the entitlement for the contract is for 4 people to stay for 7 nights, even though they arrive a day late, this entitlement does not change. The total levy payable is determined by:

1. calculating the total number of leviable nights which is 28, calculated as 4 people each entitled to stay for 7 nights
2. multiplying the leviable nights by the higher rate of the levy, £28 × £1.30 = £36.40

Early departure

For the same reasons as late arrivals, where one or more visitors leave the visitor accommodation premises early, the levy payable under the contract will be based on the entitlement under the contract, notwithstanding that the visitors will actually stay for a shorter period of time.

This is because the amount of levy payable is determined by looking at the entitlement under the contract. If visitors leave early, the entitlement under the contract will not have changed, but they will have lost out on one or more days of their visit.

Where the visitor accommodation provider does vary or amend the contract to reflect the late arrival, then the amount of liability for the levy would need to take into account the updated contract.

Example

Using the same example as above. Nina and her 3 friends are touring Wales. They book a lodge in a leviable area and plan to arrive on a Monday and stay for 7 nights. When they book, they state 4 adults will be staying in the lodge. They arrive on time on Monday and check in, but 2 of Nina’s friend fall ill and leave on Friday night, so they have only stayed 4 nights.

The calculation is the same as above, as the entitlement for the contract is for 4 people to stay 7 nights. Even though 2 of Nina’s friends leave early, their entitlement under the contract does not change. The total levy payable is determined by:

1. calculating the total number of leviable nights which is 28, calculated as 4 people each entitled to stay for 7 nights
2. multiplying the leviable nights by the higher rate of the levy, 28 × £1.30 = £36.40

It is important that visitor accommodation providers capture the number of people entitled under the contract to reside at the visitor accommodation premises overnight. Without this information, the visitor accommodation provider will not be able to calculate the amount of levy payable, and in the absence of detailed booking information, it is likely that full occupancy would be assumed for a booking to help WRA assess liability.

For Visitor Levy, there is no obligation for visitor accommodation providers to monitor visitor numbers that may change over the booking period. The most important part in determining the total levy payable is by looking at what was agreed in the contract which created the entitlement for the visitor or visitors to stay. It is most likely that visitor accommodation providers will use the original booking and contract to calculate the levy payable on a stay, and this would be evidenced through the booking request, contract, booking confirmation and any other records created in relation to that stay that the visitor accommodation provider keeps.

Where there are late arrivals, early departures or other circumstances which mean the original contract no longer accurately reflects the number of visitors staying, or how long they are staying, then the total levy payable will still be determined by the entitlement under the contract.

However, in some cases, visitors and the visitor accommodation provider may vary the contract between them to account for changes in circumstance, such as a shorter visit or number of guests changing. Where a contract is varied, then the total levy payable would be calculated based on the varied contract.

As contract variations would be matter of fact and rely on visitor accommodation provider booking terms and conditions, agreements between parties, notice periods and a range of other variables, it will be for the visitor and visitor accommodation provider to decide if a variation of contract takes place. Where there is no variation in contract, the total levy payable will still be determined by reference to the original contract and entitlement to reside overnight night under it.

If a visitor accommodation provider is VAT registered, then VAT will be due on the total amount the visitor pays to the visitor accommodation provider, including Visitor Levy if the visitor accommodation provider passes this cost on to the visitor.  

Example 

Dyfed books a 7-night stay at a hotel, which is VAT registered, in a leviable area, so the £1.30 rate of the levy applies. The visitor accommodation provider running the hotel decides to pass the cost of the levy on to visitors, and the room rate, inclusive of VAT, is £150 per night. 

From the table above, the total levy amount payable is still £9.10, and this will need to be included in the hotels self-assessment of the levy submitted to WRA.  

In addition to the Welsh Ministers having the power to change the lower and higher rate of the levy, they may also give principal councils the ability to add an amount to the lower and higher rate of the levy for their area.

Principal councils will only be able to add an amount to the existing rates of the levy if the Welsh Ministers make regulations giving principal councils the power to do so. The regulations:

• set out the amount that be added to the existing levy rates
• may set out whether a principal council can add an amount to the levy that is below the amount set out in the regulations
• may enable a principal council to add an amount, or different amounts, to the levy for only parts of the principal council area
• may specify periods of time, or allow a principal council to specify periods of time, where the added amount may apply

Subject to future regulations being made, principal councils will not be able to take steps to change the levy within the first 12 months of the levy being introduced in their area.

Before the Welsh Ministers make regulations allowing principal councils to add amounts to the lower and higher rates of the levy they must consult:

• every principal council
• every National Park authority for a National Park in Wales
• organisations that represented business that work in Welsh tourism or engaged in activities relating to tourism in Wales
• organisations that promote of facilitate tourism in Wales
• and other persons that the Welsh Ministers consider appropriate to consult

Should a principal council decide to apply an additional amount to the levy rate in their area following any future regulations, they would need to go through a local process of consultation, decision making and notification like that used for introducing a Visitor Levy. Therefore, visitor accommodation providers will be made aware through published notifications of any intended changes. The WRA will also provide information for registered visitor accommodation providers in the relevant Visitor Levy area of any changes.