England's Mayors Set to Gain Powers to Charge a Tourist Tax on Overnight Stays

A long debated idea in British tourism has taken a significant step forward. The UK Government has set out plans to give mayors in England the power to introduce an overnight visitor levy, a charge many people simply call a tourist tax, on those staying in hotels and other short term accommodation.

What has been announced

On 10 September 2026, the Government announced that Mayoral Strategic Authorities across England would be able to introduce a levy on overnight stays. It would apply to hotels, guesthouses, holiday lets and other forms of short term accommodation, covering a wide slice of the places visitors book when they travel.

The move brings England closer to a model already familiar in many European cities and beyond, where a small charge on accommodation is a routine part of a trip. Supporters argue it is a fair way to ask visitors to contribute to the places they enjoy, while critics worry about the cost to travellers.

How the levy would work

One of the most important details is how the charge would be calculated. Rather than a flat fee per night, the levy would be set as a percentage of the cost of the accommodation. The Government says this design helps protect budget holidays, because cheaper stays would pay proportionally less than luxury ones.

That approach marks a difference from some flat rate schemes seen elsewhere. In practice it means a family in a modest guesthouse would face a smaller charge than a guest in an expensive city hotel, keeping the impact lighter at the affordable end of the market.

A local choice, not a national tax

Crucially, this is not a single tax imposed across the whole country. The powers are discretionary, meaning no mayor or strategic authority would be forced to introduce a levy. Each area would decide for itself whether a charge suits its local circumstances.

Before any scheme could begin, an authority would need to publish a prospectus setting out the proposed rates, the areas covered and how the money would be used. It would also have to carry out a formal public consultation, giving residents and businesses a chance to have their say. Coastal towns and rural honeypots are among the places watching the plans most closely.

Uncapped in law, capped by pledge

Under the plans, the levy would be uncapped in law, leaving the maximum rate to local discretion rather than a fixed national ceiling. That detail drew immediate attention, since an uncapped charge could in theory rise over time depending on local decisions.

In response, ten Labour metro mayors pledged to adopt a voluntary ceiling of 5 percent. The move appeared designed to reassure the travel industry and visitors that any charges would remain modest, even without a legal cap written into the rules.

Where the money would go

The Government has framed the levy as a way to reinvest in the places tourists visit. Revenue raised would be directed towards transport, infrastructure and the wider visitor economy, alongside support for visitor facilities, local attractions and destination management.

The idea is that money collected from visitors would help maintain and improve the very things that draw them in the first place. Better transport links, well kept attractions and stronger local promotion could, in theory, make a destination more appealing over the long term.

The legislation and the pushback

The plans are tied to an Overnight Visitor Levy Bill, announced in the 2026 King's Speech and due to be introduced during the 2026 to 2027 parliamentary session. The Government expects mayors and Foundation Strategic Authority leaders to set out how they would invest levy revenue by early 2028.

Not everyone is convinced. Allen Simpson, chief executive of UKHospitality, warned that many families would end up paying significantly more, and questioned the idea of that money helping to support local government budgets. Retailers have also cautioned that extra costs on visitors could squeeze spending on the high street.

For now, the direction of travel is clear even if the detail is not. Whether a tourist tax appears in a given town will depend on local leaders, local consultations and the choices they make in the months ahead. For travellers planning future trips around England, it is a change worth keeping an eye on.