UK mayors to gain authority to levy tourist tax

The UK government is preparing to announce new plans granting mayors and regional leaders the authority to implement an overnight visitor levy on tourists. Under the upcoming proposals, local authorities will be allowed to apply a tourist tax as a percentage rate based on the cost of hotels, bed and breakfasts, and alternative accommodation types, moving away from a fixed flat fee structure.

This initiative was initially proposed under former Prime Minister Sir Keir Starmer back in November, mirroring similar accommodation tax frameworks operating in Scotland and various European cities. Deputy Prime Minister Angela Rayner is scheduled to outline further specifics during a virtual meeting with regional mayors held from No 10 North on Thursday afternoon.

Stock photo for illustration only, not from the actual event

Local leaders will retain full discretion over how the revenues generated from the visitor levy are reinvested into their regions, such as funding street cleaning operations or late-night public transport services. London Mayor Sadiq Khan, who participates in the Thursday meeting, stated the policy needs implementation as soon as possible and backs a maximum cap of five percent. Meanwhile, Manchester and Liverpool currently operate voluntary business-led visitor schemes charging fixed nightly rates per room.

In response, leading trade association UKHospitality strongly criticized the announcement, warning that the policy will introduce significant financial friction for holidaymakers. Chief Executive Allen Simpson estimated that the tax could inflate the average cost of a family holiday in England by approximately 100 to 120 pounds, driven by concerns that local mayors might exploit the lack of a strict upper limit.