Plans are expected to be outlined this week that would grant mayors in England the power to introduce a fee for tourists staying overnight in their areas. This proposed levy, sometimes referred to as a 'tourist tax,' would be a percentage of the accommodation cost, a structure designed to shield budget holiday options. The final decision on whether to implement the tax and how the generated revenue would be reinvested would rest with local leaders.
The initiative, which echoes a similar system in Scotland, was first proposed by Sir Keir Starmer's government in November. Housing Secretary Angela Rayner is scheduled to meet with mayors on Thursday to discuss the details. A government source indicated that local leaders and residents will determine the appropriateness of such a tax for their specific regions.
The Overnight Visitor Levy was mentioned in the King's Speech in May, signaling that holidays in England could become more expensive if local authorities choose to enact the charge. While the levy has no theoretical upper limit, ministers anticipate that mayors will not set excessively high rates. The prime minister has presented the policy as part of a broader devolution agenda, with local leaders expected to present plans for revenue investment by March 2028.
Mayor of Manchester, Andy Burnham, previously introduced a £1 per room, per night City Visitor Charge in April 2023, aiming to boost tourism. Regional mayors have expressed that such levies are crucial for generating income to invest in local priorities and stimulate economic growth.
Similar tourist taxes are common internationally, with cities like New York, Amsterdam, and Rome already charging overnight guests to fund local services. In Scotland, local authorities can implement a visitor levy as a percentage of accommodation costs, capped at five nights. Edinburgh was the first Scottish city to introduce this tax in July, charging an additional 5% on bookings. Glasgow is set to implement a 5% levy in January 2027. Wales is also preparing to introduce a capped levy of £1.30 per person per night starting next April.