Tourists in England face nightly levy on hotel and Airbnb stays under new plans
Ministers are set to give mayors in England the power to impose a nightly levy on hotel and Airbnb-style stays, dubbed a "tourist tax", as part of a wider devolution push. Housing secretary Angela Rayner is meeting mayors on Thursday to outline plans that would let local leaders charge visitors a percentage of their accommodation costs, rather than a flat fee, so as to protect budget breaks, with revenue going towards transport and public services. The move follows a similar scheme already operating in Scotland, but hospitality industry figures warn it could damage businesses already squeezed by tax rises, with UKHospitality's chief executive Allen Simpson arguing it amounts to an "open-ended" power that could exceed the capped tourist taxes charged in cities such as Paris, Rome and Berlin.
Under the plans, any levy is expected to be capped at around 5% of accommodation costs, with the London mayor's office indicating this would be welcomed. Andy Burnham, who introduced a £1 per room, per night charge in Greater Manchester in 2023, is likely to champion the wider policy, while Sadiq Khan and other mayors previously lobbied ministers to introduce such a levy. Edinburgh became the first Scottish city to bring in a 5% tourist tax in July, and Welsh councils will be able to charge £1.30 per person per night from April 2027. UKHospitality has urged Burnham to instead consider a "holiday bonus" scheme, in which central government revenue would be devolved to councils based on visitor numbers.
- Mayors in England may get power to charge visitors a nightly accommodation levy.
- Levy likely capped near 5% of costs, to fund transport and services.
- Hospitality sector warns of job losses; Scotland and Wales already have similar taxes.
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Tourist taxes are charges added to overnight accommodation, typically used by local authorities to raise money from visitors rather than residents. Several countries already levy them, including in cities such as Paris, Rome and Berlin, and Scotland introduced its own scheme this year, with Edinburgh the first city to bring in a 5% charge. England has no such tax at present, though Greater Manchester operates a smaller £1-per-room, per-night charge under separate rules introduced in 2023.
The UK government is now considering handing mayors in England new powers to introduce a similar levy on hotels and short-term lets such as Airbnb. This sits within a broader "devolution" agenda, a longstanding effort to shift more decision-making and revenue-raising powers from central government in Westminster to regional mayors and councils. Key figures include Angela Rayner, the housing secretary responsible for devolution policy, and mayors such as Andy Burnham in Greater Manchester and Sadiq Khan in London, who have pushed for such powers.
The proposal matters because it touches on how local services are funded, how tourism-dependent businesses are affected by additional costs, and the wider question of how much financial control should sit with regional leaders rather than national government. The hospitality industry, represented by bodies such as UKHospitality, has an interest in the outcome given it is already dealing with other tax pressures.
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