English mayors and strategic authorities will gain powers to introduce overnight visitor levies from 2028 under the government’s newly published Fiscal Devolution Roadmap.
Chancellor John Healey Confirms 2028 Launch for Overnight Visitor Levies
The UK government has formally outlined plans to hand England’s 13 Mayoral Strategic Authorities new revenue-raising tools. Announced by Chancellor John Healey during his budget speech, the framework permits regional leaders to introduce an accommodation levy starting in 2028. The policy forms part of a broader fiscal devolution package that will transfer 20% of business rates revenue to mayors from 2027, followed by a share of income tax receipts from April 2028. Healey stated that the levy would sit alongside the transfer of business rates and income tax receipts as long-term funding streams for local infrastructure, ensuring more money raised locally can be spent locally. Business travel bodies have called for business travel to be excluded from any levy, with the Business Travel Association, the Global Business Travel Association, and the Institute of Travel Management arguing in a joint response to the government’s February consultation that business trips should not be taxed like tourism. Andrew Clarke, commercial director at the Business Travel Association, noted that business travellers are not tourists.
While the government frames the visitor levy as a mechanism for establishing long-term funding streams for local transport, housing, and public services, the hospitality industry has voiced sharp opposition. UKHospitality warned that a £2 per person per night charge could drive up the expenses of a two-week family vacation by as much as £100. UKHospitality has also campaigned for a substantial reduction in hospitality’s tax burden through a VAT cut, reformed business rates, and reduced National Insurance Contributions, warning that the tourist tax will make England less competitive internationally.
Industry Backlash and the Competing Economic Arguments Over Flat Fees Versus Percentage Charges
Hospitality leaders have condemned the financial pressure arriving alongside other mounting operational costs. Jon Hendry Pickup, CEO of Butlin’s, argued that making UK destinations more expensive risks deterring the very visitors whose spending supports local communities
. Michal Rao, regional director – Northern Europe at STR, noted that a higher tourist tax rate could have a large impact on average daily rate.
If local areas are going to retain significantly more business rates revenue, alongside a share of income tax, the case for adding another tax on British families taking a holiday in their own country becomes even harder to understand.
Jon Hendry Pickup, CEO of Butlin’s
The structural mechanics of the levy remain a point of active debate.
Safeguards, National Park Consultations, and Regional Resistance Across England
To ease worries originating in rural economies, housing minister Jim McMahon gave assurances that regional mayors and local authorities must conduct local consultations and impact assessments before rolling out any such tax. However, the government stopped short of granting National Park Authorities a formal veto over taxes applied within protected rural regions. Local leaders will also have the ability to exempt certain accommodation types from any levy, with potential exemptions subject to consultation including tent pitches, touring caravan pitches, and hostels. Kevin Hollinrake raised questions in Parliament regarding safeguards and whether National Park Authorities’ consent would be required, noting that large parts of the North York Moors National Park and Yorkshire Dales National Park rely heavily on tourism. Research commissioned by York and North Yorkshire Mayor David Skaith and conducted by York St John University indicated that an overnight visitor charge of £1 per night within the region could generate an annual revenue of up to £26 million.
Mayors and local leaders will be required to undertake impact assessments and carry out local consultations before implementing a levy. This could include consultation with relevant National Park Authorities.
Jim McMahon, Housing Minister
Adoption of the tax rests entirely at the discretion of regional authorities. Regional mayors, including David Skaith, have pledged to cap a new fee on visitors’ overnight stays at five per cent. Conversely, some regional leaders have pushed back.
