The UK Government has confirmed plans to introduce an Overnight Visitor Levy Bill, granting English mayors the authority to impose a tourism tax on overnight stays in hotels, B&Bs, and holiday lets. London is among the 13 mayoral areas that could be affected.
What the Bill Proposes
During Wednesday's King's Speech, the Government announced the levy would "enable places to reinvest revenue in local priorities, support economic growth, strengthen public services, and improve the visitor experience." Officials stated it will help mayors and local leaders generate funds to reinvest in regional economies, aligning England with Scotland, Wales, and other international locations where similar taxes exist.
The measures will be restricted to regions governed by England's 13 Mayoral Strategic Authorities, including London, Manchester, and Liverpool, rather than being nationwide. Individual mayors will decide whether to implement the charge and set rates within their jurisdictions.
Support from Mayors
Mayor of London, Sadiq Khan, said: "Giving mayors the powers to raise a tourist levy is great news for London. The extra funding will directly support London's economy, and help cement our reputation as a global tourism and business destination."
Tracy Brabin, Mayor of West Yorkshire, commented: "Mayors have made a strong case for the introduction of this levy as the first step toward fiscal devolution, and we're delighted the government has listened. By asking visitors to pay a small fee on overnight stays, we'll be able to invest more into making our regions even better places to visit."
Liverpool City Region Mayor Steve Rotheram added: "Our visitor economy is worth more than £6 billion a year and supports over 55,000 local jobs. A modest levy is money that would stay local and be reinvested in the things that make our region stand out."
Industry Criticism
In response to the King's Speech, UK Hospitality Chief Executive Allen Simpson remarked: "It's a shocking U-turn after it told both the House of Commons and UK Hospitality that it would not implement a holiday tax. A holiday tax is wildly unpopular, as well as economically destructive."
Joss Croft, chief executive of lobby group UKinbound, added: "While we have not yet seen the detail of the legislation, UKinbound does not support further taxation on international visitors, who already contribute through one of Europe's peak levels of VAT and some of the world's highest visa and ETA fees and air passenger duty. As these powers are taken forward, the devil will be in the detail."
Background and Next Steps
The 2025 Budget saw the Government pledge to introduce a new overnight visitor levy, followed by a consultation on its structure. The Overnight Visitor Levy Bill fulfils that commitment. A response to the consultation will be released shortly, providing further clarity on design and implementation, including whether the power should extend to Foundation Strategic Authorities.
Based on the November 2025 consultation, the levy could apply to 11 categories of overnight accommodation: hotels, guesthouses, bed and breakfasts, hostels, campsites and caravan parks, self-catering properties, serviced apartments, aparthotels, holiday lodges, glamping sites, university halls let commercially during holidays, religious retreat accommodation, and accommodation in vehicles or vessels permanently situated in one place.
