Visitor Levy for visitor accommodation providers: technical guidance - Meaning of overnight stays in visitor accommodation

For Visitor Levy, the meaning of an overnight stay is key in determining the total amount of levy payable.

An overnight stay takes place where:

• one or more people are entitled, under a contract, to reside in or at visitor accommodation for one or more nights in an area where the levy applies
• the accommodation is provided to those people in the course of trade or business being carried on by the visitor accommodation provider
• the accommodation is not the sole or main residence of any of those people, and
• any of those people enter the accommodation as they are entitled to under the contract

For the purposes of Visitor Levy, “night” means a period that starts on one day and ends on the next day.

The visitor accommodation provider, in respect of an overnight stay in visitor accommodation, is the visitor accommodation provider that:

• provides the accommodation in or at which the stay takes place, and
• is an occupier of the premises at which that accommodation is provided

A key part of Visitor Levy, and for contracts between visitors and visitor accommodation providers, is the entitlement it creates for a visitor to reside in or at visitor accommodation.

The contract must entitle one or more people to stay for one or more nights in or at the visitor accommodation.

Contracts would usually be formed at the point a booking is confirmed, whether that is through a booking platform, over the phone, through an online marketplace or directly with the visitor accommodation provider.

Contracts, and how they are entered into, can be wide-ranging. For Visitor Levy, the format of the contract is not important, only that a contract exists. Visitor accommodation providers, as part of their business and record keeping requirements, must keep records, such as copies of contracts, booking confirmations or any other supporting documents, that will help them determine the total levy payable under the contract, and to demonstrate that the correct tax has been paid to WRA.

For the purposes of Visitor Levy, “contract” does not include:

• a contract of service
• a contract of apprenticeship, or
• a contract for services, under which a person entitled to reside in or at the visitor accommodation provides services to the visitor accommodation provider

Contract for services example

Dafydd runs a cottage in a leviable area and needs some repair work. Dafydd has a builder carry out the work and he stays at the premises whilst they carry out repairs. The contract for service with the builder allows him to stay at the accommodation whilst they are carrying out repair works. Therefore, this contract would not count as a contract and no levy arises.

Contract of service or apprenticeship example

Where a person who is employed by the visitor accommodation provider, or an apprentice of the visitor accommodation provider stays overnight at the visitor accommodation provider’s visitor accommodation, and is doing so under their contract of employment or apprenticeship with the visitor accommodation provider, that stay will not count as an overnight stay for levy purposes.

Amy is a hospitality apprentice, and stays, for work purposes, at the premises of a visitor accommodation provider in relation to her apprenticeship. Under her contract for apprenticeship with the visitor accommodation provider, Amy is allowed to stay overnight at the visitor accommodation, which means Amy’s contract for apprenticeship does not count as a contract for Visitor Levy purposes and no levy arises on her overnight stays.

Where a teacher is accompanying students and is staying at visitor accommodation that is not owned by the school, then the contract that entitles them to reside overnight at the accommodation for the trip would be within the scope of the levy.

Example

A school books a trip at a visitor accommodation premises, and the visitor accommodation provider allows teachers accompanying students to stay for free. The contract for the overnight stay by those attending the school trip includes all the students and teachers. It does not matter that the teachers are allowed to stay for free, and the overnight stays by the teachers count when determining the total amount of levy payable for the school trip. This is because the teachers are entitled to stay overnight at the visitor accommodation under the contract.

Where more than one person is entitled under a contract to reside at visitor accommodation, the overnight stay can take place even if only one person entitled under that contract takes entry into the accommodation.

For example, Jordan and Fred book to stay in a yurt in an area where the levy applies, and the contract formed with the visitor accommodation provider entitles them to stay overnight at the premises. At the last minute, Jordan is called away for work and cannot join Fred. The contract remains unchanged, so when Fred checks in at the visitor accommodation, enters the yurt and stays there, the overnight stay takes place as he has exercised the entitlement under the contract.

There are a number of reasons why a stay may not be classed as an overnight stay for Visitor Levy purposes, and so no liability arises on these types of stay.

An overnight stay does not take place in visitor accommodation if:

• the contract entitles one or more particular individuals to stay in or at visitor accommodation, whether or not they are accompanied by any other person
• every particular individual is entitled under the contract to stay there for more than 31 nights, whether or not those nights are consecutive, and
• every particular individual is entitled under the contract to stay there on every night that the contract provides for

The 32 overnight stays do not need to be taken in any set period, and the nights do not need to be consecutive, however the requirement for there to be one single contract for the particular individual or individuals still applies.

Example 1

Kari books a room in a hotel for 40 nights, the contract that entitles her to stay at the hotel entitles her to stay every night in the hotel. As Kari has booked for more than 31 nights, this trip is outside the scope of the levy, and the 40 nights do not count as overnight stays.  

Example 2

Lloyd travels for work frequently and directly books with a self-catering provider so that he has 12 trips over the next 18 months planned out, each for 5 nights. He enters into one contract with the visitor accommodation provider, and the contract that entitles him to stay at the accommodation entitles him to stay every night in the accommodation for 5 nights on each of the 12 trips. As Lloyd has booked a total of 60 nights, which is more than 31 nights, these trips which are governed by one single contract are outside the scope of the levy and the 60 nights do not count as overnight stays.

Overnight stays do not take place where the accommodation:

• is arranged for a person by a principal council, or the accommodation is provided on behalf of the council, under Part 2 of the Housing (Wales) Act 2014, which relates to homelessness
• is provided under section 4 or Part 6 of the Immigration and Asylum Act 1999
• is provided on behalf of the Secretary of State in connection with a requirement imposed under section 3(6) of the Bail Act 1976
• is provided under Part 1 of the Offender Management Act 2007 for probation purposes
• relates to facilities provided under paragraph 9 of Schedule 10 to the Immigration Act 2016 for the accommodation of a person at an address specified in an immigration bail conditions

As part of record keeping requirements, visitor accommodation providers should keep records relating to stays where the levy does not apply. This will help them demonstrate that the total levy they pay to WRA is correct, and that their Visitor Levy return is accurate.

The WRA will produce further guidance on these types of stays.