A proposed 'holiday tax,' known as the Overnight Visitor Levy, introduced by Labour mayors in the UK is facing scrutiny over its potential impact on individuals who are not tourists, including business travelers and those visiting sick relatives. The levy, set to add 5% to the cost of accommodation, has drawn criticism from opposition parties and industry groups who argue it unfairly burdens those traveling for non-leisure purposes.
During a recent debate in the House of Commons, shadow ministers argued that the tax would affect a wide range of individuals, from business people to those traveling for medical treatment. Figures indicate that business travelers accounted for 16 million overnight stays in 2024, with visits to friends and relatives making up a significant portion of the total 307 million overnight stays that year. Industry leaders have warned that the tax could increase costs for all guests and put thousands of jobs at risk.
Some lawmakers also called for exemptions for specific groups, such as young people attending camps and individuals requiring respite holidays due to disability. Hospitality industry representatives have voiced opposition, stating that many family-run businesses do not support the measure, viewing it as ill-timed and an additional burden that could harm local economies.
Adding to the controversy, it has emerged that Members of Parliament (MPs) who represent constituencies outside of London will be eligible to claim the cost of the Overnight Visitor Levy back on their parliamentary expenses when staying in hotels for work. The Independent Parliamentary Standards Authority (IPSA) confirmed that reimbursements for MPs' accommodation costs cover all associated taxes and levies, up to a nightly limit of £230 in London. In the 2025-26 fiscal year, approximately £700,000 was paid out for such expenses.