British holidaymakers are going to have to pay more to journey to Spain following a rise in Spanish VAT. The Spanish Prime Minister Mariano Rajoy declared on 11 July that VAT for the leisure industry will increase from eight per cent to 10 per cent. This will have a direct impact on the cost of accommodation as well as food and drink in restaurants, bars and hotels for British travellers this summer.
The VAT elevation will come into play for independent hotel bookings from 1 August 2012. Therefore families who have booked to holiday in Spain in August this year risk going over budget. For example a reservation in an independent hotel with food and drink that would have totalled £1000 will now rise by £20. Fortunately for some travellers, package holiday bookings already made for this year remain unaffected, as has been confirmed by the Association of British Travel Agents.
Spanish general tax is also rising from 18 per cent to 21 per cent in an effort to tackle Spain's deteriorating position in the economic crisis. As result, British tourists will also have to pay more for general purchases such as clothes and cigarettes. Before the tax surge Spain was one of the cheaper European destinations available to British holiday-goers. Likewise, it is statistically one of the most popular destinations for British tourists; the Spanish Institute of Tourism Studies (Instituto de Estudios Turísticos) has revealed that Britons make over 12 million trips to Spain annually. Therefore, those planning a holiday in the sun will have to weigh up the expense of journeying to Spain in relation to other destinations.
Despite the VAT increase, Britons will be less affected compared to other European travellers due to the fact that the pound is currently strong against the euro. Some tour operators are also relieved that the rise in leisure VAT isn't more than two per cent, as this is unlikely to make a great hole in most visitors' wallets.
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