Mayors to be given power to impose tourist tax

Mayors in England will soon be granted authority to implement a tourist tax, according to plans to be unveiled on Thursday. This tax will be determined by local leaders and levied as a percentage of accommodation costs for overnight visitors, rather than a fixed fee, in an effort to safeguard budget-friendly vacations. Housing, Communities and Local Government Secretary Angela Rayner will convene with mayors at 10 Downing Street before additional policy details are announced on Thursday.

The levy is expected to have no upper limit, although government sources suggest mayors will likely avoid setting it too high, with most indicating it would be a few percent. In London, officials have not yet decided on the scheme's specifics, but it is believed the levy will not exceed 5% of accommodation costs. The tax, first proposed under Sir Keir Starmer following similar initiatives in Scotland and Wales, may be implemented by March 2028, as stated in a government document from July.

Prime Minister Andy Burnham previously reaffirmed his commitment to the policy as part of his broader devolution agenda. Charges similar to this levy exist across Europe, with revenue used to fund local services. Local leaders would decide how to allocate the tax revenue, while tourism industry groups have expressed concerns about the tax's impact and called for uniformity in its application across regions.

UK Hospitality, a trade body, has written to the Prime Minister urging consideration of an alternative "holiday bonus" instead. Allen Simpson, the chief executive of UK Hospitality, warned that Edinburgh's July tax has already caused damage and could put jobs at risk in tourism-dependent communities. Andrew Griffith, the shadow chancellor, cautioned that an unlimited tourist tax could significantly hinder opportunities for young people in the tourism and hospitality sectors, emphasizing that propping up town hall finances at the expense of youth unemployment would be unjust.