England’s Mayors to Gain Power to Impose an Uncapped Tourist Tax

The UK government will allow regional and city mayors in England to introduce an Overnight Visitor Levy on hotels, B&Bs, holiday lets and similar accommodation. The levy will be calculated as a percentage of the accommodation cost rather than a flat fee and will have no statutory upper limit. Details are to be outlined by Housing, Communities and Local Government Secretary Angela Rayner in a meeting with mayors on September 10, 2026. Mayors will decide whether to apply the charge and how any revenue is spent, with spending plans expected by early 2028.

England to Give Mayors Uncapped Tourist Tax Powers

The idea was first raised by Sir Keir Starmer’s government in November 2025 and featured in the King’s Speech on 13 May 2026. It follows visitor-levy schemes in Scotland—Edinburgh introduced a 5 % levy on 24 July 2026, capped at five nights—and the forthcoming capped levy in Wales (up to £1.30 per person per night from April 2027). England already has voluntary city-level charges, such as Manchester’s £1 per room per night City Visitor Charge (April 2023) and Liverpool’s £2 per night scheme introduced in 2023.

BBC News

• England records over 130 million overnight stays each year.

The Guardian

• Modelling by Central London Forward suggests a 3 % levy in London could raise more than £350 million annually.

England Mayors to be permitted to set uncapped tourist tax from 2028

• Oxford Economics estimates a 5 % levy nationwide could cost the sector up to £1.6 billion, lead to 33 000 job losses, and reduce tourism-related GDP by £2 billion by 2030.

Industry leaders warn England tourist tax will damage competitiveness

Conservative leader Kemi Badenoch called the policy “a Labour double whammy” because hotels already pay 20 % VAT and would face VAT on the new levy as well.

Jubilant Labour mayors hail Burnham's new £1.6bn 'tourist tax' as hospitality industry warns of jobs 'catastrophe' - and struggling families face paying more for holidays

Impact estimates differ sharply: the Guardian cites a potential loss of 12 million visits and 33 000 jobs, while Oxford Economics projects a £1.6 billion industry hit but does not quantify visitor decline. No final guidance exists on exemptions (e.g., emergency shelters) or on how revenue must be earmarked, leaving local authorities to set their own rules.

Reuters

• “What we’re talking about here is an open-ended power for mayors to set tourism taxes at any level they want,” — Allen Simpson, chief executive, UKHospitality

The Guardian

• “The lack of a cap on rates is a real issue,” — Alice Jeffries, tax policy manager, CBI

Bloomberg

• “This measure will give mayors the choice to raise and reinvest funding where it's needed most,” — Angela Rayner, housing secretary

Reuters