| The Tax Barometer is composed of four trip elements:
lodging, car rental, meals, and airport arrival and departure. Each element of the
trip is priced according to a standard purchase by a hypothetical "WTTC
Traveler" in each destination.
This trip includes
the purchase of four nights' lodging, four days'
car rental, twelve meals, and one set of international arrival and departure
airport charges. Taxes imposed on these purchases are then
identified, recorded, and developed into a sector index. Next, these elements are
aggregated into a composite index for the destination, based on the average cost of each
element included in the standardized trip. If you would like more information on the
development of the Tax Barometer, please refer to our research methodology. |
 |
Rank |
|
Total tax $ for 5-day/4-night trip: |
$335.70 |
51 |
|
Percentage of total item cost: |
21.66% |
51 |
|
Overall tax index: |
126 |
34 |
The first item in the above table represents
the combined tax total
paid by the WTTC Traveler in each of the four sectors in
London. The second
item (percentage of total
item cost)
indicates what percentage of the total bill
is devoted to taxes.
The last item (overall tax index)
reflects the cumulative change in the amount
of tax paid in U.S. dollars between June 1994 and
June 2002.
The rankings show how
London compares with other Tax Barometer cities; a ranking of 1
is most competitive, while a ranking of 52 is least competitive.
Summary:
London currently has an
overall Tax Barometer index of 126,
indicating a
26% increase in
travel-related taxes since June 15, 1994,
the 18th highest increase among all surveyed destinations.
This change can be
attributed to increases in the air passenger and car rental sectors;
tax rates on hotel rooms and restaurant meals remain at their base index level. For a five-day, four-night trip to
London, travelers
can expect to pay approximately $336.00 in tourism-related taxes, a
total that ranks as the second highest among all
52 surveyed destinations.
|
 |
Rank |
|
Average price for 4-day rental (mid-size) without taxes: |
$145.15 |
- |
|
Airport access fee/premium location
surcharge: |
£17.00 |
- |
|
Road tax/vehicle licensing fee (per day): |
£0.95 |
- |
|
Value added tax (VAT): |
17.50% |
- |
|
Total charges for 4-day rental with taxes: |
$207.59 |
- |
|
Total tax $ for 4-day rental: |
$62.44 |
40 |
|
Percentage of total car rental cost: |
30.08% |
50 |
|
Car rental tax index: |
134 |
30 |
|
Summary:
Car rental taxes have risen 34% in London since 1994, an
increase that ranks as the 23rd highest among all 52 surveyed
destinations. Tax charges on a four-day mid-sized car rental total
approximately $62.00, 13th highest among all surveyed destinations.
In 1994, London imposed two taxes on car rentals: a £12.00 airport
access fee/premium location surcharge and a VAT of 17.5%. While
the VAT rate remains the same, the airport access fee has been
increased twice (from £12.00 to £15.00 in 1999 and from £15.00 to
£17.00 in April 2001), and a new £0.95/day road tax/vehicle licensing
fee was introduced in 1999. |
 |
Rank |
|
Average price for 4-nights lodging without taxes: |
$836.36 |
- |
|
Value added tax (VAT): |
17.50% |
- |
| Total
charges for 4-nights lodging with taxes: |
$982.73 |
- |
|
Total tax $ for four-nights: |
$146.37 |
49 |
|
Percentage of total hotel room cost: |
14.89% |
45 |
|
Hotel
tax index: |
100 |
8 |
Summary: Despite the fact that hotel
tax rates has remained steady in London since 1994, the approximately
$146.00 in taxes paid during a four-night stay ranks as
the fourth highest among any surveyed destination, and the highest
among all 18 European destinations. Taxes represent nearly 15%
of the final lodging bill, a percentage that ranks as the eighth
highest among all surveyed destinations. |
 |
Rank |
|
Average price for 12 restaurant meals
without taxes: |
$306.06 |
- |
|
Value added tax (VAT): |
17.50% |
- |
|
Total charges for 12 meals with taxes: |
$359.62 |
- |
|
Total tax $ for 12 meals: |
$53.56 |
43 |
|
Percentage of total restaurant meals cost: |
14.89% |
38 |
|
Restaurant tax index: |
100 |
5 |
Summary: As is the case with hotel rooms, London's tax rate
on restaurant meals remains at its 1994 base index level. The
approximately $54.00 in taxes collected on twelve meals is the 10th
highest among all surveyed destinations. |
 |
Rank |
|
International air passenger duty: |
£40.00 |
- |
|
International passenger service charge: |
£8.40 |
- |
|
Total tax $ for international arrival and departure: |
$73.33 |
52 |
|
Percentage of total trip cost: |
4.73% |
45 |
|
Air passenger tax index: |
354 |
50 |
Summary:
Taxes on international air passengers have risen 254% in London since
1994, the 3rd highest increase among all surveyed destinations.
The approximately $73.00 in taxes is the highest total overall,
and by far the highest among any surveyed destination in Europe.
In 1994, taxes on international air passengers consisted of a single
tax, the international passenger service charge, which was levied at a
rate of
£13.67.
This fee has since been reduced to
£8.40,
but this decrease has been more than offset by the implementation of a
new tax, the international air passenger duty. This air
passenger duty was introduced in 1996 at a rate of
£10.00,
and has since been doubled two times: in 1997 (from £10.00
to £20.00) and in 2001 (from £20.00
to £40.00). It should be noted that
the £40.00 rate is applicable only to those
passengers whose destination is not located within the European Union;
the rate is £20.00 for destinations within the E.U. |
 |
|
Barometer No. 2:
An international air
passenger duty of UK £10.00 was implemented.
Barometer No. 3:
The international passenger service charge was reduced from £13.67
to £8.50.
Barometer No. 5:
The air passenger duty was increased from £10.00 to £20.00.
Barometer No. 6:
The international
passenger service charge was reduced from £8.50 to £6.50.
Barometer No. 7:
The airport
surcharge on rental cars was increased to £15.00.
Barometer No. 8:
A new £0.95 per day road tax/vehicle licensing fee was introduced,
affecting car rental rates. In addition, the international passenger
service charge was increased to £7.30.
Barometer No. 9:
The international passenger service charge was increased from £7.30 to
£8.10.
Barometer No. 10:
The airport access fee/premium location charge was increased to
£17.00, effective April 1, 2001. Also, the international passenger
service charge was increased from £8.10 to £8.40 (effective 4-1-01),
and the international air passenger duty was doubled from £20.00 to
£40.00.
|
|
