Mayors in England are set to gain powers to introduce an uncapped tourist tax on overnight stays, with the levy charged as a percentage of accommodation costs, as reported by The Times.Â
The Government says charging a percentage rather than a flat fee will help protect cheaper holidays, while mayors will be able to set their own rates.
The plans are expected to be unveiled by ministers today (10 September), with the levy potentially coming into force in 2028.
Housing Secretary Angela Rayner will meet mayors in No 10 North before ministers announce further details of the policy this afternoon.
London Mayor Sadiq Khan has backed the plans, saying a ‘well-designed, modest levy’ could provide additional funding for local tourism infrastructure, culture and visitor experiences.
He told The Standard it ‘needs to happen sooner rather than later’.
London’s levy will be capped at 5% of accommodation costs, although no decision has yet been made on how the money raised will be allocated.
The plans follow Edinburgh becoming the first UK city to introduce a tourist tax, which came into effect in July. The Scottish capital’s rate is 5% of the overnight stay, covering hotels, B&Bs and self-catering accommodation, and is capped at five nights.
The move has been criticised by the hospitality industry, with UKHospitality Chief Executive Allen Simpson telling BBC Radio 4’s Today programme that an uncapped levy could increase the cost of UK holidays and put jobs at risk.
He warned that the levy could add up to £120 to the cost of a family holiday in England.
“It will be the case that you’ll have holiday parks which can’t open in the shoulder seasons and of course people who go on holiday will just have that little bit less money in their pocket,” he claimed.
