Could your area introduce a tourist tax?
Mayors and local leaders in England will soon gain new powers. They will be able to introduce an overnight visitor levy on short-term accommodation. So, could your area introduce a tourist tax? Increasingly, the answer may be yes.
What the Government announced
The Government confirmed the plans on 10 September 2026. The announcement followed a consultation which closed on 18 February 2026.
Importantly, the levy will remain optional. Mayors and leaders of Foundation Strategic Authorities will decide two things:
- Whether to introduce the levy at all
- How to spend the money raised
How the charge will work
The levy will be based on a percentage of the accommodation cost. It will not be a flat fee. According to the Government, this avoids penalising people taking cheaper holidays.
Furthermore, local leaders can apply exemptions. Certain accommodation falls outside the scope entirely, including:
- Temporary accommodation
- Shelters and refuges
Hotels and other providers will pay the levy to the relevant mayor or strategic authority. Meanwhile, the Government has promised to make administration as simple as possible.
Where the money could go
Revenue could support a range of local priorities. For example, authorities might invest in:
- Public transport
- High streets
- Cultural attractions
- Public spaces
- Tourism infrastructure
However, each area will decide its own approach. Rates, exemptions and spending plans will be set locally. In addition, leaders must consult local businesses and residents first.
When it will happen
Legislation will follow to establish the levy formally. After that, the Government expects spending plans by early 2028. Naturally, the levy adds a cost for visitors. Yet the amount depends entirely on where they stay.
Elsewhere in the UK
England is not moving first here. Edinburgh’s visitor levy took effect on 24 July 2026. Similarly, Cardiff Council expects to introduce one from 1 April 2027.
Talk to us
Could your area introduce a tourist tax that affects your business? If you run accommodation or rely on tourism, plan ahead now. Contact our team today for practical advice.
