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

What was confirmed on 10 September

On 10 September 2026, the Ministry of Housing, Communities and Local Government and HM Treasury published their formal response to the Visitor Levy in England consultation, which ran for 12 weeks from 26 November 2025 and drew 1,223 responses. The response confirms that both Mayoral Strategic Authorities and Foundation Strategic Authorities, so the power extends beyond areas with an elected mayor, will get a discretionary Overnight Visitor Levy on paid overnight stays. The rate will be a percentage of the accommodation cost with no national cap, and no cap on the number of consecutive nights it applies to. Legislation is expected during the current Parliamentary session; local leaders are expected to set out how revenue will be invested by March 2028.

Why the government says this makes sense

The visitor economy is a significant part of the case: it contributed £64.3bn directly to the UK economy and supported 1.3 million jobs in 2024, with 42.6 million international visitors and 105.6 million domestic overnight trips that year. The government's broader argument is about local fiscal power generally, just 6% of UK taxes are collected sub-nationally, the lowest share in the G7, and it frames the levy as one part of a wider shift that also includes local income tax retention and business rates devolution. Visitors use the same pavements, transport, and public spaces as residents, and a modest contribution toward that is standard practice already in Edinburgh, Wales, and much of Europe.

Where the final design departs from what respondents wanted

This is the most interesting part of the response. A percentage-based rate was actually opposed by 60% of respondents, with the strongest opposition coming from accommodation providers concerned about complexity, yet the government adopted it anyway, arguing it's the fairer, less regressive option since cheaper stays generate proportionally smaller charges. Similarly, 58% of respondents supported a national cap on the rate, and the government decided against one, reasoning that a cap risks becoming a de facto standard rate regardless of local conditions. The government was explicit that this is "a finely balanced issue" it will keep reviewing rather than a closed question.

London wants to move first

Mayor Sadiq Khan has said he wants the levy introduced "sooner rather than later" and is proposing a rate 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 written to government pledging to voluntarily cap their own levies at 5%, a political commitment rather than 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 a single, uncapped tax raising power risks being used more aggressively over time, with thinner margin operators, holiday parks in shoulder seasons especially, 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.

On whether a percentage rate actually suppresses demand, the government's own response cites Amsterdam, Berlin, and Vienna as working examples of the model. Amsterdam is the clearest test case: it 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 23.7 million in 2025, above the city's own 20 million cap. One data point isn't a guarantee for every English authority, but it doesn't support the idea that a levy in this range reliably drives visitors away.

Exemptions: narrower and more specific than first reported

The framework distinguishes two tiers. Nationally, non-commercial accommodation is exempt outright: registered gypsy and traveller sites, temporary accommodation used as a primary residence, and charitable accommodation for shelter or refuge. Beyond that, strategic authorities can choose to exempt a small, specific set of low-cost categories locally, tent pitches, touring caravan pitches, and hostel or dormitory-style accommodation, reflecting their use for school and youth group trips. What authorities cannot do is exempt a whole locality within their area, to avoid confusing visitors and businesses about where the levy applies. That leaves any authority protecting budget travellers with category-based rules to administer rather than a simple area carve-out, a genuinely finely balanced trade-off the consultation responses reflected too: 47% of respondents opposed giving local leaders any additional exemption powers at all, preferring one simple national model.

Why domestic holidaymakers aren't exempted either

The government was explicit on this point: exemptions will be based on accommodation type only, not visitor characteristics. It ruled out a carve-out based on who's staying, including nationality or residency, specifically because verifying eligibility would burden both providers and visitors, in some cases requiring personally sensitive information to be shared. Instead, the government points to the percentage rate itself as the mechanism that already reflects a visitor's circumstances: a family booking a lower-cost stay pays a proportionally smaller charge, UK or overseas, without anyone checking a passport at the desk.

Naming where the money goes

Strategic authorities will decide locally how to invest levy revenue, guided by their regional growth strategies, and must report annually on what's collected and spent. Some are already getting specific: 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

The government's own response flags the risk it's trying to manage: accommodation providers operating across multiple strategic authorities face fragmentation as each authority runs its own registration and collection system, and the government says it's exploring shared delivery arrangements and common technical standards to reduce that burden. That's precisely the operational layer Trippz for Governments is built to sit in, applying the right rate and exemption category correctly at the point of booking or check-in, across as many authorities as a provider operates in, 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: [MHCLG/HM Treasury: Visitor Levy in England, Government Response (10 September 2026)](attached PDF) 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