The controversial new tax would increase revenue for local councils to reinvest in public services.
The new tax was proposed by the government last November (Image: Getty)
A new tourism tax was announced in the King’s Speech last week, which could see holidaymakers charged a levy on stays across the nation. The Overnight Visitor Levy will be added to stays in hotels, B&Bs and holiday rentals, with regional Mayors given the power to implement charges.
If the bill is passed later this year, it could add as much as £140 to a two-week stay for a family of five. Money made by the tax will then be reinvested back into the local community, including on infrastructure and public services. However, there are concerns the scheme will further impact an already struggling industry in the UK, with a lettings boss warning the Labour Government is taxing tourism “out of existence“.
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The Overnight Visitor Levy was first announced by Chancellor Rachel Reeves last November. A consultation was launched on how the new tax would look, with the government arguing local mayors and leaders felt behind in their ability to raise revenue.
Saqiq Khan, Mayor of London, previously said: “Giving mayors the powers to raise a tourist levy is great news for London. The extra funding will directly support London’s economy, and help cement our reputation as a global tourism and business destination.”
Mayor of West Yorkshire, Tracy Brabin, added: “Mayors have made a strong case for the introduction of this levy as the first step toward fiscal devolution, and we’re delighted the government has listened.
“By asking visitors to pay a small fee on overnight stays, we’ll be able to invest more into making our regions even better places to visit – driving tourism and growth, unlocking opportunities, and helping our businesses thrive. This is a further vote of confidence in devolution and shows the government is backing mayors to deliver our ambitions.”
Sadiq Khan said the tax is ‘great news for London’ (Image: Getty)
Meanwhile, Edinbugh’s new “Visitor Levy” will come into place from July 24, making the city the first in the UK to charge for staying overnight under official law. The tax, which will see a 5% charge on the total cost of paid overnight accomodation, will be capped at the first five consecutive nights of stay.
Wales will implement the same tax by 2027 while cities in England, including Manchester and Liverpool, have already introduced a small fee when you stay overnight due to legal loopholes using an Accommodation Business Improvement District (ABID).
In Europe, Amsterdam currently imposes a 12.5% tax on the cost of hotel rooms. Likewise, Paris also has a compulsory levy with an additional €10.73 added per person, per night for a five-star hotel.
However, there are concerns in the UK that the tax could collapse the tourism industry. Kate Allen, who runs Finest Stays in South Devon, described it as “just another stealth tax” while Peter Robinson, a tourism operator in Cornwall, said the levy would inevitably “increase the cost of holidays for hard-up families”.