Spanish holiday tax hike will see travellers facing higher prices from September

Published on 1 January 1970 by Raffick Marday

Holidaymakers planning on travelling to Spain that do not book before the end of August face losing out financially.

prepaid cardsFailing to book before the end of the month could see those headed for Spain shelling out more money for car hire and accommodation.

The increase in the general rate of VAT from 18% to 21%, which will be enforced on September 1 by the government in a bid to boost the country’s frail economy, is behind the price rises.

Official figures show that 19 million foreign holidaymakers visited Spain between January and the end of May – but tourists could be put off by the VAT hike, say the Spanish Tourism Commission.

They added that the tourism sector “regrets the Government’s lack of sensitivity for a strategic sector that is key to kick-starting and accelerating Spain’s economic recovery”, indicating that instead of boosting the economy the hike would actually prove more of a setback.

The rate for items such as accommodation and food will jump to 10% from 8%, which will see families planning last minute breaks to Spain before the school holidays come to a close, losing out financially if they do not book prior to September 1.

Assuming the price hike is passed on in full, a family who booked a £500 car hire in September would be likely to pay around £16 more than if they booked in August.

Gareth Robinson, managing director of car hire price comparison site Carrentals.co.uk, said: “Unfortunately, for people travelling to Spain in September, everything will cost that little bit more. Booking as much as possible in advance before the increase comes into effect means holidaymakers can still grab a bargain.”

According to the Association of British Travel Agents (ABTA), Spanish-bound holidaymakers who have already purchased package breaks are unlikely to find themselves affected by the changes.

This follows the news that thousands of people are poised to jet off to Europe in a bid to recover from their ‘Games hangover’.

If you have planned to go on holiday this year, it is worth considering a prepaid card, which helps travellers stay on top of their budget by preventing overspending.

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