England plans to give mayors power to introduce tourist tax

Plans to give mayors in England the power to introduce a levy on tourists are expected to be outlined on Thursday.

Under the proposals, a fee would be charged to people staying overnight and local leaders would decide how the revenue raised should be reinvested.

The idea - dubbed the tourist tax - was first raised by Sir Keir Starmer's government in November and is similar to a scheme running in Scotland.

The levy will be charged as a percentage of the cost of accommodation, rather than as a flat fee - a move the government argues will protect budget holidays.

In theory, there will be no upper limit - though ministers are said to believe mayors are unlikely to make it too expensive.

The government will announce more details after the Housing Secretary Angela Rayner meets mayors on Thursday.

A government source said "it will be up to local leaders and local voters" in England "to decide what is right for their area".

The Overnight Visitor Levy, which was outlined in the King's Speech in May, means a holiday in England could become more expensive if local leaders decide to implement the tax.

Sir Keir had planned to bring forward legislation to introduce the levy before he was replaced as prime minister by Andy Burnham but the bill has not been brought forward yet.

Burnham was mayor of Manchester when the city introduced the City Visitor Charge in April 2023 - a £1 per room, per night fee - to pay for measures aimed at attracting more visitors.

Regional mayors say the levy is needed to raise more income to invest in local priorities and support economic growth.

These taxes are common in Europe and the rest of the world, with New York, Amsterdam and Rome applying overnight charges to accommodation stays to fund local services.

In Scotland local authorities can introduce a visitor levy on overnight accommodation set as a percentage rate.

Edinburgh became the first city there to introduce the tax in July, with those staying overnight in hotels, bed and breakfasts and self-catering accommodation charged an additional 5% on top of their original booking cost. However, the charge is capped at five nights.

Elsewhere in Scotland, a 5% levy in Glasgow is due to come into force from January 2027.

In Wales, a capped levy of £1.30 per person per night is set to be introduced in April next year.