Visitor Levy bill Lands in Parliament, with UKHospitality Warning of Jobs Risk

Legislation enabling mayors in England to charge visitors for overnight stays was introduced to the House of Commons on Thursday, setting up a significant new cost consideration for hotels, B&Bs and other accommodation providers.

The Visitor Levy Bill would allow mayors and foundation strategic authorities to raise a new source of revenue from tourists. The charge would be set as a percentage of the accommodation price rather than a fixed nightly amount, with the rate left to each mayor.

Government said ten mayors have already indicated they would not set the rate above 5%.

Any authority wanting to introduce the levy must first publish a draft plan and impact assessment, which local residents and businesses would be invited to comment on. The plan must set out proposed rates, thresholds and exemptions, and authorities must consult local firms before making final decisions.

Member councils of a strategic authority could propose amendments, which the mayor would be obliged to consider. In areas without a mayor, a levy could only proceed with unanimous agreement. In London, the London Assembly would hold the right to formally consult on any proposal.

The levy would apply to the first 28 consecutive nights of a stay. Occasional hosts, such as those letting a spare room, would only become liable once their earnings pass a threshold that local areas could adjust.

Exemptions would cover student accommodation, care homes, children’s homes, school boarding houses, temporary accommodation, shelters and refuges. Local authorities could add further exemptions.

Secretary of State for Housing, Communities, and Local Government Angela Rayner said: “Millions of people visit our wonderful towns and cities each year, and it’s right that our communities should be able to feel the benefit of that footfall.

“Every pound raised through these levies will stay in the local area. Whether that’s better transport, thriving high streets, or more attractions that keep visitors coming back.

“This is about giving mayors and local leaders the choice to invest back into what matters most to local people, while protecting lower-cost stays and making sure businesses have their say.

Some English destinations already operate similar schemes through business improvement districts. In Greater Manchester, a £1 per room per night charge introduced in 2023 raised £2.8m, which went towards street cleaning.

Labour mayors, who have lobbied for the power for some time, welcomed the bill.

Allen Simpson, chief executive of UKHospitality, said: “It’s genuinely shocking to see the government bring forward legislation to hike the cost of a family holiday and risk 33,000 jobs, because that’s exactly what its Holiday Tax Bill will do.

“Mayors will be able to introduce an uncapped holiday tax on Brits and then spend the funds on whatever they like, with no legal requirements to even use the funds to benefit hospitality.

“It is hard-working families that will be forced to pay more for their summer break to prop up local government finances. It is people in coastal and rural communities that rely on hospitality and tourism who will lose their jobs.”