England's Overnight Visitor Levy Is Now Official: What the Government Just Confirmed

What changed on 10 September

The UK government confirmed on 10 September 2026 that mayors and other local leaders in England will get the power to charge an uncapped Overnight Visitor Levy on hotels, B&Bs, and short term lets. Rather than a national ceiling like Wales's flat rate, the levy follows Scotland's model: a percentage of the accommodation cost with no statutory upper limit. Legislation has not yet reached Parliament, and no English authority has a confirmed rate or start date. Local leaders must publish how they plan to reinvest the revenue by early 2028.

Why mayors say this makes sense

The underlying logic is not new. Visitors use the same pavements, transport, and public spaces as residents, and a small charge on overnight stays is how most comparable cities already ask them to contribute toward that. Edinburgh has run a 5% levy since July 2026. Wales introduces a capped £1.30 per person per night rate from April 2027. Paris, Berlin, and Barcelona have charged some version of this for years. Framed that way, the England rollout is less a new idea than England catching up to a norm.

London wants to move first

Mayor Sadiq Khan has said he wants the levy introduced "sooner rather than later" and is proposing a percentage based charge capped at 5% of the room rate, rather than the flat £2 to £3 per night that business group BusinessLDN has argued for. City Hall analysis has put potential annual revenue for London at over £350m depending on the final rate. Ten Labour mayors, spanning London, Greater Manchester, Liverpool City Region, the West Midlands, the North East, the West of England, West Yorkshire, South Yorkshire, the East Midlands, and York and North Yorkshire, have since written to the Chancellor and to Angela Rayner pledging to voluntarily cap their own levies at 5%. That cap is a political commitment, not a legal one. Conservative and Reform mayors, including Tees Valley's Ben Houchen, have said they will not introduce a levy at all.

Hospitality's warning, and what the evidence elsewhere shows

UKHospitality has argued that giving mayors a single tax raising power risks it being used more aggressively over time, and that thinner margin operators, holiday parks in shoulder seasons especially, are the most exposed. The Telegraph reports the sector has lost more than 100,000 jobs since Labour took office, which the industry attributes to a combination of rising National Insurance, business rates, and now the prospect of this levy.

Because the levy is percentage based rather than a flat fee, the government's pledge to protect budget holidays by ensuring low cost accommodation carries the lowest rate is largely built into the structure itself: a cheaper room generates a smaller charge automatically, without needing a separate carve out.

On whether a higher rate actually suppresses demand, Amsterdam is the clearest test case so far. The city raised its tourist tax from 7% to 12.5% at the start of 2024, and overnight stays have set a new record every year since, reaching 22.9 million in 2024 and 23.7 million in 2025, both above the city's own 20 million cap. It is one data point rather than a guarantee for every English city, but it does not support the idea that a percentage levy in this range reliably drives visitors away.

Exemptions or one flat rate: the administrative trade-off

Authorities can exempt specific accommodation categories, campsites are the example given, but they cannot exempt whole localities, to avoid confusing visitors and businesses about where the levy applies. That constraint means any authority trying to protect budget travellers has to build category based rules rather than a blanket area exemption, verified correctly at every booking or check-in across the whole region. A single flat rate is simpler to apply but exempts nobody. A category based structure protects the family caravan holiday but asks more of whoever administers it.

Should domestic holidaymakers be exempted too?

The levy applies to UK and international visitors alike, and there's no indication any authority is considering exempting British holidaymakers. That's probably the right call from an administrative standpoint: verifying a guest's residency at every booking or check-in would add another category on top of the accommodation-type exemptions authorities are already weighing, and hospitality businesses, already asked to apply category rules correctly, are unlikely to welcome a second layer of checks. The affordability concern a domestic exemption would address is largely already handled by the rate being percentage based rather than flat: a family booking a lower cost stay pays a proportionally smaller charge, UK or overseas, without anyone needing to check a passport at the desk.

Naming where the money goes

Some authorities are already getting specific about the spending side, which may matter as much as the rate itself for public buy in. Central London Forward, representing 12 London boroughs, has called for at least half of any London levy revenue to be guaranteed to the boroughs absorbing the bulk of visitor impact. In the West of England, mayor Helen Godwin has pointed to later bus services, and Bath and North East Somerset leader Kevin Guy has named pavements and public toilets specifically. A levy that funds a named, visible local improvement is a different sell to residents and visitors than one that disappears into general revenue.

Where Trippz for Governments fits

Whatever mix of rate and exemption category each authority settles on, applying it correctly at the point of booking or check-in is an operational problem before it's a communications one. Trippz for Governments is built to take that load off an authority's plate, so the part that matters to the public, what the money funds, gets the attention rather than the collection mechanics. Authorities working through these design questions can see how that works at trippz.com/governments.

Sources: BBC: Labour mayors in England vow to cap tourist tax at 5% The Telegraph: Burnham gives mayors unlimited tourist tax powers Evening Standard: Sadiq Khan 'tourist tax' of up to 5% sparks row Yahoo/AOL: How much could a London tourist tax generate for the capital? (Central London Forward analysis) NL Times: Amsterdam tourism hits record 23.7 million overnight stays despite city tourism cap