England's Mayors Get Power to Levy Tourist Tax on Overnight Stays

Regional mayors across England are to be given the authority to impose a levy on overnight accommodation, under plans announced by the British government on Thursday.

The measure, called the Overnight Visitor Levy, would allow mayors to charge visitors a percentage of the cost of their stay. The government presented the policy as a way of shifting both power and money away from London and into the hands of local leaders.

Prime Minister Andy Burnham, who took over from Keir Starmer in July, has championed the levy as a means of giving mayors greater financial autonomy. He said last week that the tax would take effect towards the end of the next financial year, with mayors expected to publish their spending plans by early 2028.

Angela Rayner, Secretary of State for Housing, Communities and Local Government, said the change would let mayors "raise and reinvest funding where it's needed most", supporting local services, public spaces and attractions used by residents and visitors alike, with decisions taken by those who know their areas best.

The announcement drew swift opposition from the hospitality sector. UKHospitality, which represents the industry, argued the levy would place an extra burden on British families and add to administrative red tape.

"Give mayors one tax-raising power on one sector and they will pull that lever until it snaps," said the body's chief executive, Allen Simpson.

Simpson pointed to research by the consultancy Oxford Economics estimating that a fully implemented 5% levy by 2030 would cost around 33,000 jobs and reduce economic output by £2.2 billion, equivalent to about $2.98 billion.

The industry also contends that British hospitality already bears a 20% sales tax, double the typical rate across much of Europe.

Scotland has already acted on the issue, with Edinburgh introducing a 5% levy in July, capped at five nights.