Mayors Get Power to Charge a Visitor Levy on Hotel Stays: What UK Holidaymakers Will Pay

What the government announced

On 10 September 2026 the Ministry of Housing, Communities and Local Government announced that mayors and leaders of Foundation Strategic Authorities in England will be given the power to introduce an Overnight Visitor Levy. The levy is a charge on overnight stays in paid accommodation. It is not a national tax and it is not yet in force. The announcement follows a consultation that ran from 26 November 2025 to 18 February 2026, which proposed covering hotels, guesthouses, B&Bs, hostels, campsites, self-catering properties and short-term lets.

The government said the levy must be charged as a percentage of the cost of accommodation, not a flat fee. It said this approach protects budget holidays because a percentage charge scales with the price paid. No national cap has been set. Mayors will decide whether to introduce a levy, at what rate, with what exemptions, and how to spend the money, after consulting residents and businesses. Campsites are given as an example of a sector that could be exempted. Temporary accommodation, shelters and refuges will not be subject to the levy. Hotels and other accommodation providers will collect it and pay it to the strategic authority.

How the levy would work: a percentage of the room price

The levy would be calculated as a percentage of the room price. That means the amount added to a bill rises with the cost of the stay. A percentage levy scales with the room price, so a £80 room at a 5% rate would add £4 a night and a £250 room £12.50 a night, if a mayor chose that rate. The 5% figure is an illustration, not a decided rate. No national cap has been set, so different mayors could choose different percentages.

Because the levy is a percentage rather than a flat fee, the government argues that budget holidays are protected relative to a fixed charge. A flat fee would fall more heavily on cheaper rooms as a share of the total cost. Under a percentage model, the cash amount is lower for cheaper rooms. The levy would be collected by hotels and other accommodation providers and paid to the strategic authority. The government has not set a national rate, so the final cost to visitors will depend on decisions taken locally after consultation.

Who decides, and which regions want it

Mayors and leaders of Foundation Strategic Authorities in England will decide whether to introduce a levy. They will also decide the rate, any exemptions, and how to spend the money. Decisions must follow consultation with residents and businesses. The government expects mayors to set out spending plans by early 2028. A bill will be introduced in due course to bring the power into effect.

Several mayors welcomed the power. Liverpool City Region Mayor Steve Rotheram said a modest levy could raise up to £18m a year for a visitor economy worth £6.8bn. London Mayor Sadiq Khan said he strongly welcomed the power and would consult boroughs and businesses before decisions. York and North Yorkshire Mayor David Skaith said no decision would be made without full public consultation. Mayors of the East Midlands, West Yorkshire, West of England and South Yorkshire also welcomed the power. Angela Rayner, Housing Secretary, said local leaders should have the power to make the most of visitor numbers and reinvest where it is needed most. Sir Tristram Hunt of the V&A and Centre for Cities' Andrew Carter supported it.

What a levy could add to a family break, worked examples

For households, the effect depends on the room price and the rate chosen by the local mayor. A percentage levy scales with the room price, so a £80 room at a 5% rate would add £4 a night and a £250 room £12.50 a night, if a mayor chose that rate. Over a three night break, that would be £12 on the cheaper room and £37.50 on the more expensive room at the same illustrative rate. The 5% rate is not a decided rate and no national cap has been set.

Whether a levy applies, and its rate, will differ by region. A family staying in one Foundation Strategic Authority area could pay a levy while a family staying in a neighbouring area without a levy would not. Work trips would normally be included, so employees and employers should expect the charge to appear on business accommodation bills where a levy applies. The earliest levies are unlikely before 2027 or 2028, so bookings for the immediate period are unlikely to be affected. Visitors should check the total price and any local levy when booking once schemes are announced.

Which stays are covered and which are exempt

The consultation that ran from 26 November 2025 to 18 February 2026 proposed covering hotels, guesthouses, B&Bs, hostels, campsites, self-catering properties and short-term lets. The government has not confirmed a final list, but the levy is described as a charge on overnight stays in paid accommodation. Hotels and other accommodation providers will collect it and pay it to the strategic authority. That means the charge would appear on a bill or invoice from the provider, not as a separate tax paid directly by the visitor.

Temporary accommodation, shelters and refuges will not be subject to the levy. Mayors will decide what exemptions to apply, and campsites are given as an example of a sector that could be exempted. Because exemptions are a local decision, the treatment of campsites, self-catering properties and short-term lets could vary between areas. Owners of small B&Bs and holiday lets would need to check the rules set by their strategic authority once a scheme is announced, including how to collect and remit the levy.

What the hospitality industry says

Hospitality trade body UKHospitality has warned that a levy would add costs for businesses and visitors. Citing Oxford Economics, it said a 5% charge could reduce UK output by around £2 billion in 2030. The industry concern is that additional charges could deter some overnight stays and add administrative burdens for accommodation providers, particularly smaller businesses that would need to collect and remit the levy.

The government's position is that local leaders should have the power to make the most of visitor numbers and reinvest where it is needed most. VisitBritain figures cited by the government show 42.6 million inbound visits to the UK in 2024, £32.5bn spend and 293 million nights. Mayors who support the power argue that a modest levy can raise significant sums for local visitor economies. The debate is likely to continue as the bill is introduced and as mayors consult on whether to use the power.

How Edinburgh's levy works and what England can learn

Edinburgh's visitor levy is in force from 24 July 2026 under Scottish legislation. It is 5% of the accommodation cost before VAT, charged on the first five nights only. It applies to hotels, B&Bs, hostels, self-catering, holiday lets and campsites. It applies to all overnight visitors including people travelling for work. The Scottish scheme provides a working example of a percentage based levy with a night limit and a defined rate.

England's proposed power differs in key ways. No national cap has been set, and mayors decide whether to introduce a levy, at what rate, with what exemptions, and how to spend the money. The government has said the levy must be a percentage of the cost of accommodation, not a flat fee. Unlike the Edinburgh scheme, there is no confirmed national rate or night limit for England. The Edinburgh example shows how a percentage levy operates in practice, including collection by accommodation providers and inclusion of work trips.

When it could start

A bill will be introduced in due course. The government expects mayors to set out spending plans by early 2028. That timeline suggests the earliest levies are unlikely before 2027 or 2028. No levy is in force in England at the time of the announcement. Mayors must consult residents and businesses before decisions, so any scheme would follow a local consultation and a spending plan.

For households planning domestic holidays, weekend breaks and work trips, the practical effect is that nothing changes immediately. Once a mayor announces a scheme, the levy would be a percentage of the room price on overnight stays in paid accommodation in that area. For small B&B and holiday let owners, the key dates will be the introduction of the bill and the publication of local spending plans. The government has not set a national cap, so rates and exemptions will vary by region.

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Frequently asked questions

Is the Overnight Visitor Levy already in force in England?

No. On 10 September 2026 the government announced that mayors of Foundation Strategic Authorities in England will be given the power to introduce an Overnight Visitor Levy. A bill will be introduced in due course, and the government expects mayors to set out spending plans by early 2028. No levy is in force in England at the time of the announcement. Any scheme would follow local consultation with residents and businesses.

How would the levy be calculated?

The levy must be charged as a percentage of the cost of accommodation, not a flat fee. The government says this protects budget holidays because the charge scales with the price paid. No national cap has been set. A percentage levy scales with the room price, so a £80 room at a 5% rate would add £4 a night and a £250 room £12.50 a night, if a mayor chose that rate. The 5% figure is an illustration, not a decided rate.

Which stays would be covered and which are exempt?

The consultation proposed covering hotels, guesthouses, B&Bs, hostels, campsites, self-catering properties and short-term lets. Temporary accommodation, shelters and refuges will not be subject to the levy. Mayors will decide what exemptions to apply, and campsites are given as an example of a sector that could be exempted. Hotels and other accommodation providers will collect the levy and pay it to the strategic authority.

Would work trips be included?

Work trips would normally be included. The levy applies to overnight stays in paid accommodation, and there is no indication that business travel would be exempt. Edinburgh's visitor levy, in force from 24 July 2026, applies to all overnight visitors including people travelling for work. For England, whether a levy applies and its rate will differ by region, so employees and employers should check local rules once schemes are announced.

When could the earliest levies start?

A bill will be introduced in due course, and the government expects mayors to set out spending plans by early 2028. That timeline suggests the earliest levies are unlikely before 2027 or 2028. Mayors must consult residents and businesses before decisions, so any scheme would follow a local consultation and a spending plan. No levy is in force in England at the time of the announcement.