Visitor Levy Bill would let mayors in England add a percentage charge to overnight stays

Mayors and strategic authorities in England would be able to add a charge to overnight stays in their area under the Visitor Levy (England) Bill, which the government introduced in the House of Commons on Wednesday. Nothing changes for visitors yet. The Bill has to pass through Parliament, and each area would then have to consult before deciding whether to bring in a levy.

The Parliament website lists the Bill's next stage as second reading in the Commons. Its long title describes the levy as a new local tax on stays in residential accommodation, imposed by strategic authorities.

A percentage, not a flat fee

Any levy would have to be set as a percentage of what the accommodation costs rather than a fixed sum per night. The government says this means people in cheaper rooms pay less. Ten mayors have committed that a levy in their area would be no higher than 5%.

It would apply only to the first 28 consecutive days of a stay, because longer stays count as long-term accommodation. People who let out a spare room now and then would pay only if their income from it went above a set threshold, which local leaders could adjust for their own tourism market.

Exempt accommodation

The government has confirmed national exemptions for:

• student accommodation
• care homes and children's homes
• school boarding houses

Temporary accommodation, shelters and refuges would not be charged either. Areas could add limited local exemptions of their own, with camping pitches given as an example.

Before a levy can start

An area that wants a levy would first publish a draft plan and an impact assessment covering the expected effect on the local economy, businesses and visitors, along with the proposed rate, threshold, exemptions and how the money would be spent. Local people and businesses would then be consulted, and the mayor would need the necessary agreement within the strategic authority. The responses and final versions of both documents would have to be published.

Members of a combined or strategic authority could propose changes to the plan, and mayors would have to consider them. In a foundation strategic authority a levy could only go ahead with unanimous support. Every authority running a levy would publish an annual report on what it raised, what it spent and what it planned to spend next.

Hotels and other providers would account for and pay the levy, and the government says it will issue guidance on registering, paying and reporting. Enforcement would use standard tax powers in line with those for national self-assessed taxes, with local leaders deciding how to use them.

Spending the money

Money raised would stay in the area. The government lists high streets, public spaces including toilets and parks, cultural events, transport, security and promoting the destination as possible uses.

Some places already raise money from visitors through business improvement districts run by accommodation providers. In Greater Manchester, a £1 per room per night charge introduced in 2023 raised £2.8 million in its first year, which helped pay for more street cleaning in the city.