Labour plans all-new holiday tax raid that could smash tens of thousands of Britons with £3k costs

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'Labour should focus less on squeezing taxpayers dry and more on cutting the welfare bill,' Tory frontbencher Richard Fuller said

Labour has drawn up plans for a new holiday tax raid that could cost tens of thousands of Britons as much as £3,000 per year.

John Healey is considering taxing holiday lets as second homes rather than as businesses.

May holiday let owners would be forced to sell up as a result of the tax rise, tourism bosses have warned.

This would then lead to knock-on impacts on local pubs, restaurants and other businesses which rely on tourism to stay profitable, they added.

James Murray, the Paymaster General, confirmed in a written parliamentary answer the Treasury was now reviewing "the tax treatment of short-term lets, such as self-catering accommodation".

Richard Fuller, the Shadow Chief Secretary to the Treasury, told The Telegraph: "Labour has launched a £9billion business rates raid, compounding the damage done by its jobs tax and employer red tape.

"Now it is looking for ways to pull more and more people into scope for its crippling taxes including with a holiday cottage tax.

"Labour should focus less on squeezing taxpayers dry and more on cutting the welfare bill so we can cut taxes and grow our economy."

One possible change would see all self-catered accommodation paying council tax, rather than business rates.

Alistair Handyside, the chairman of the Professional Association of Self-Caterers, said the change would cost the average holiday let owner between £1,000 and £3,000 per year.

He said: "The average self-catering business owns 1.2 properties and it is usually a second income, often run by working mothers or retired people, who have already been hit by 25 government interventions in the past four years.

"The self-catering sector is already declining and a lot of people will decide it’s just not worth it any more.

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"I can tell you that the Government already takes more money out of my business every year than my wife and I do.

"What the Government doesn't realise is that holiday lets provide the bed space for people visiting areas that don't have the hotel spaces that London and big cities have.

"If the bed spaces decline, so does the local economy, because pubs, restaurants, butchers, all sorts of businesses only stay in profit because of the annual influx of tourists."

The tourism boss also said British tax cash would be spent abroad if accommodation became scarce, because families would rather holiday in Europe rather than vacation at home.

Tourism also took a major hit after Andy Burnham gave mayors the power to set an overnight visitor levy.

Some mayors, including Conservative Tees Valley Mayor Lord Houchen, have criticised the plans, saying he would "never raise taxes".

A Treasury spokesman told The Telegraph: "The Chancellor is fully focused on his priorities, to give families and businesses a bit of breathing space, back British jobs, and drive growth in every postcode, underpinned by a commitment to meet the fiscal rules.

"As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals."