UK government proposes new overnight visitor levy for English mayors

The British government has announced plans to empower mayors and strategic authorities in England to implement an overnight visitor levy. Following a 12-week consultation, the policy allows local leaders to decide whether to introduce the tax on short-term commercial accommodation, including hotels, bed-and-breakfasts, and holiday rentals. Unlike a flat fee, the levy will be calculated as a percentage of the total accommodation cost, with no national cap currently planned on the rate.

While the government argues that the measure will provide essential funding for local investment and public services, the hospitality industry has expressed strong opposition. UKHospitality CEO Allen Simpson warned that the tax could add between £100 and £120 to the average family holiday, potentially risking jobs and reducing tourism spending. Accommodation providers will be responsible for collecting and reporting the funds through a self-assessment system, though they are permitted to pass the cost to guests. Housing Secretary Angela Rayner has been engaged in discussions with local leaders regarding the implementation of the framework, which grants local authorities autonomy over both the decision to adopt the levy and the allocation of the generated revenue.