Tourist Tax to be Introduced Across England
The government has confirmed that mayors across England will be given the authority to implement a new tourist tax. Announced on Tuesday 25th November 2025, the visitor levy will enable local leaders to place a modest charge on overnight stays in various types of accommodation.
Funding Local Infrastructure and Transport
Communities Secretary Steve Reed revealed the policy a day before the budget. The funds generated from this charge on hotels, bed and breakfasts, guest houses, and holiday lets are intended for reinvestment into the local area. The money will support local transport systems, infrastructure projects, and the broader visitor economy, with the goal of potentially attracting more tourists in the long run.
This move brings England in line with Scotland and Wales, which are already in the process of introducing their own tourist taxes. Officials pointed out that this aligns English cities with major global tourist destinations like New York, Paris, and Milan, which already have similar charges in place. Government research indicated that reasonable fees have a minimal impact on visitor numbers.
Mixed Reactions from Leaders and Industry
The announcement has been met with both support and criticism. Regional Labour leaders, including London Mayor Sir Sadiq Khan and Greater Manchester's Andy Burnham, have been vocal advocates for the measure.
Sir Sadiq Khan described it as "great news for London", stating the tax will "directly support London's economy and help cement our reputation as a global tourism and business destination". The Greater London Authority estimates a £1 per day levy could raise £91 million, while a 5% charge could generate £240 million.
Andy Burnham said the revenue would allow Greater Manchester to invest in essential infrastructure for visitors, such as cleaner streets and enhanced public transport, including later-running buses and trams.
However, the proposal was strongly condemned by the hospitality industry. Kate Nicholls, Chair of UKHospitality, warned that this "damaging holiday tax" could cost the public up to £518 million. She asserted that the cost would be passed directly to consumers, driving inflation and undermining government efforts to reduce the cost of living.
In opposition, Conservative Tees Valley Mayor Lord Houchen stated he would not introduce the tax, saying "Thanks, but no thanks." Conservative shadow local government secretary Sir James Cleverly branded it "yet another Labour tax on British holidays" that would increase costs for families and harm the hospitality sector.
The government has launched a consultation on the plans, which will run until 18 February. This consultation will consider details such as whether a cap should be placed on the amount that can be charged.
