Ministers outline plans for overnight visitor levy as mayors gain new revenue powers

Local leaders across England could soon be given the power to introduce a levy on overnight stays under government proposals designed to provide new funding for tourism, transport, cultural attractions and public services. The plans form part of a wider devolution package aimed at shifting more financial decision-making from Whitehall to regional leaders.

The government has been consulting on the design of a new visitor levy that would allow mayoral strategic authorities to charge visitors staying overnight in paid accommodation. According to the consultation, ministers sought views on who should be able to introduce the levy, which types of accommodation should be covered, how rates should be calculated, who would be responsible for paying it and how the proceeds should be spent.

Under proposals confirmed by ministers, local leaders would have discretion over whether to introduce a levy in their areas and how revenues are invested. The government said the charge would be calculated as a percentage of accommodation costs rather than a flat-rate fee, arguing that this would protect lower-cost and family holidays from disproportionate charges.

Announcing the policy, the government said funds raised could be used to support high streets, public transport, tourism infrastructure and local events. Ministers also argued that the measure would bring England more closely into line with destinations in Europe and North America where tourism taxes or visitor levies are already commonplace.

The move follows a consultation launched by the Ministry of Housing, Communities and Local Government and HM Treasury, which examined how a visitor levy could operate in England. The exercise invited evidence from local authorities, tourism organisations, businesses and members of the public before a final policy framework was developed.

Support for the proposal has come from several elected mayors. Steve Rotheram, Mayor of the Liverpool City Region, said a “modest levy” on overnight stays could generate significant additional income for events, culture and visitor infrastructure in the region. He estimated that a local scheme could raise up to £18 million annually for reinvestment.

The Mayor of London, Sadiq Khan, also welcomed the announcement, arguing that a visitor levy could provide an additional funding stream to support growth, cultural attractions and infrastructure while helping to manage the pressures created by large visitor numbers.

Other regional leaders, including mayors in the East Midlands, West Yorkshire, South Yorkshire, York and North Yorkshire, and the West of England, said the measure could create a sustainable source of investment for visitor destinations and local services if introduced in partnership with businesses and residents.

The proposals are likely to attract close scrutiny from the hospitality sector. While supporters argue that tourism taxes are well established internationally and can help maintain local attractions and services, accommodation providers and industry groups are expected to examine whether additional costs could affect competitiveness or influence visitor spending decisions.

The government has indicated that local leaders would be able to determine whether a levy is appropriate for their area and could offer exemptions for certain accommodation types. Any future schemes would be subject to local consultation before implementation.