Chancellor Rachel Reeves is considering a nightly tax on hotel and Airbnb-style short-term rental stays in England, according to The Times.
The plan is expected to be announced in her Budget speech on 26 November.
Mayors in cities such as London and Manchester would be able to levy a per-night fee on visitors to raise hundreds of millions of pounds to be spent on local services, said The Times.
The change would be introduced via amendments to the English Devolution and Community Empowerment Bill, which is moving through Parliament.
Although the Chancellor had previously rejected local tourism taxes in England, Treasury officials are understood to have been persuaded by evidence that European cities haven’t seen a drop off in visitors following their introduction.
However UKHospitality has warned that nightly tourist taxes will increase costs and push up prices. Chairperson Kate Nicholls said that if English cities followed Edinburgh’s plan for a 5% tax, the tax combined with VAT would equal 27%.
