England’s mayors are being given the power to introduce a new levy on overnight stays as part of the Government’s Budget, unveiled today (26 November).
The Ministry of Housing, Communities and Local Government (MHCLG) says that local leaders in England will be given the power to impose a ‘modest charge’ on visitors. Any new tourist tax would apply to visitors at accommodation providers, including hotels, holiday lets, bed and breakfasts, and guesthouses.
England attracts over 130 million overnight visits each year. The money raised could help fund local community improvement projects and enhance visitor experiences, without needing approval from the central government.
Powers to introduce a tourist tax already exist in Scotland and Wales, with Edinburgh set to start charging a 5% levy on anyone booking a hotel, B&B, or holiday let from next July. Welsh cities can charge a flat rate per room per night.
Visitors staying in Manchester city centre already pay a £1-per-night ‘city visitor charge’, introduced in April 2023, to fund extra street cleaning and other services. Although the fee is voluntary, guests have to opt out of paying. Some £2.8m was collected in its first year.
The Mayor of Greater Manchester, Andy Burnham, said earlier this month that he wants a compulsory tourist tax in place before Manchester hosts football matches during Euro 2028. He argued for the tax on the basis that extra transport will be needed during major events like this.
In response to the Government’s announcement of this voluntary tourist levy, Burnham said: “It’s great news that the Government is committing to giving regional mayors the powers to introduce a visitor levy – a measure we have long called for. Greater Manchester already has a thriving visitor economy, and a visitor levy will help us sustain good growth over the next decade.
“I’m proud that nearly two million people from all over the world choose to visit Greater Manchester every year. The money they spend contributes about £9 billion annually to our economy, supporting over 100,000 jobs. The levy will allow us to invest in the infrastructure these visitors need, such as keeping our streets clean and enhancing our public transport system by running buses and trams later, ensuring every experience is a positive, memorable one.”
Many cities around the world charge tourists a small fee when they visit, including New York, Paris and Milan. Research suggests that reasonable fees have minimal impact on visitor numbers.
The announcement is the latest step forward in the Government’s mission to devolve power and give those who know their communities best control over how money is spent in them.
Mayor of Liverpool City Region, Steve Rotheram said: “For too long, cities like ours have been expected to compete on a global stage without the basic tools that other places take for granted. Cities like Barcelona and Paris raise tens of millions each year through similar schemes – money that goes straight back into improving the visitor experience and supporting the local people who keep those destinations thriving.
“I’m pleased that the government has listened and acted – giving areas like ours the powers we need to support and grow our economies in a sustainable way. Our visitor economy is worth more than £6 billion a year and supports over 55,000 local jobs. A modest levy is money that would stay local and be reinvested in the things that make our region stand out: our world-class culture, iconic events, vibrant public spaces and the infrastructure that ties it all together.”
Businesses, communities and others with an interest in the measure can have their say on how it should work, with a 12-week consultation on Gov.UK that will close on 18 February.