England introduces tourist levy on hotel/Airbnb stays, debated by mayors and hospitality industry
Consensus Summary
The UK government is proposing a tourist levy on overnight stays in England, with mayors like Sadiq Khan and Andy Burnham advocating for the policy after years of lobbying. Both the Guardian and ABC confirm the levy will cap at 5% of accommodation costs, aligning with schemes already in place in Scotland (Edinburgh’s 5% tax since July) and Wales (£1.30 per person per night from April 2027). The tax, first raised in November, aims to fund local transport and public services but faces criticism from the hospitality industry, which warns it could harm jobs and deter visitors. Revenue projections vary, with the ABC citing up to £240 million annually for London at a 3% rate, while the Guardian highlights concerns over higher costs for budget travelers. The levy’s legal framework remains unresolved, as the Overnight Visitor Levy bill has not yet been introduced to parliament, leaving details like exemptions and enforcement unclear.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- A tourist tax (levy) on overnight stays in England will be capped at 5% of accommodation costs, as outlined by both the Guardian and ABC.
- The policy was mentioned in the King’s Speech in May, but no legislation was introduced before Starmer stood down as prime minister, per the Guardian.
- London Mayor Sadiq Khan and other mayors (including Andy Burnham) have lobbied for the levy, with Khan explicitly stating the cap will not exceed 5% in the ABC.
- Edinburgh introduced a 5% tourist tax in July, as reported by both sources.
- The levy would apply to hotels, Airbnbs, guesthouses, and other short-term lets, as stated by both sources.
- UKHospitality warns the 5% levy would be among the highest in Europe, per the Guardian, while the ABC notes similar taxes exist in cities like New York (14%) and Paris ($2–$15 per night).
- The levy’s revenue would fund local transport and public services, with mayors deciding allocations, as mentioned by both sources.
Points of Difference
Details reported by only one source:
- The levy was discussed in last year’s budget (2025), which squeezed the hospitality industry with tax rises and employment costs.
- Angela Rayner, housing secretary, is meeting mayors on Thursday to outline the levy’s structure.
- Andy Burnham (Greater Manchester mayor) introduced a £1 per room per night visitor charge in April 2023.
- Mayors must submit revenue investment plans by March 2028, per No 10.
- Wales will introduce a £1.30 per person per night tax from April 2027.
- UKHospitality proposed a ‘holiday bonus’ alternative, where central government devolves tourism revenue based on visitor numbers.
- The UK government consulted on the levy design between November 2025 and February 2026.
- The Overnight Visitor Levy bill has not yet been tabled in parliament.
- Mayors can set local exemptions or vary levy application across their regions.
- A 3% levy could raise up to £240 million ($450 million) annually, per Central London Forward.
- 1.2 million Australians visited the UK in 2024, spending a total of £1.7 billion ($2,561 average per visit).
- Australian travellers criticize the tax as adding to high overseas travel costs.
Where the reporting differs
Details that conflict, or appear in only some outlets:
- The Guardian states the levy was outlined in the King’s Speech in May, while the ABC does not mention this specific timing.
- The Guardian references a 5% cap from London mayor’s office sources, but the ABC only confirms Khan’s support for a cap without explicitly stating the 5% figure until later in the report.
- The Guardian mentions a ‘holiday bonus’ proposal by UKHospitality as an alternative, which the ABC does not cover.
- The Guardian notes Wales’ £1.30 per person per night tax from April 2027, while the ABC does not specify Wales’ exact levy structure or date.
Source Articles
Tourists in England face nightly levy on hotel and Airbnb stays under new plans
Labelled a tourist tax, proposals would give mayors power to decide how revenue raised should be invested UK politics live – latest updates Holidaymakers will face a nightly levy on hotel and Airbnb-style stays in England under plans ministers are due to outline to give mayors new powers. The idea, labelled a tourist tax, was first raised by Keir Starmer’s government in November and is similar to a scheme running in Scotland. It would allow mayors to charge a fee to visitors staying overnight an
London tourist tax on accommodation will be capped at 5pc, mayor says
Legislation unveiled by the government this week will allow local authorities to charge a flat fee or percentage of an overnight stay for domestic and international guests in London accommodations.
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