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Labour mayors in England pledge to cap tourist tax at 5%
UKHospitality says the levy could add about £100 to £120 to average family holiday costs in England, as the government prepares legislation for a new overnight-stay fee.
Labour regional mayors in England have pledged to cap a planned fee on visitors' overnight stays at 5%, after hospitality leaders warned the policy could threaten jobs, according to the BBC. The proposed levy would let local leaders charge an uncapped rate as a percentage of accommodation costs, but Labour metro mayors in 10 city regions said they would voluntarily limit the charge if it is applied in their areas. Reform UK and the Conservatives, whose regional mayors are expected to oppose the levy, have faced criticism of the policy from their national parties. In a letter to Chancellor John Healey and Local Government Secretary Angela Rayner, Labour mayors described 5% as a “reasonable ceiling” to prevent excessive or widely varying charges between regions, while still leaving room for local variation through consultation. The government says it will introduce a bill to Parliament “in due course,” and that the levy would apply to both UK residents and overseas visitors. The government previously said it would protect budget holidays by ensuring low-cost accommodation pays the lowest levy, and that revenue could be invested in high streets and local transport. UKHospitality said jobs are now at risk and that the levy could add about £100 to £120 on average to the cost of a family holiday in England, while local leaders would need to clarify by early 2028 how the raised revenue will be reinvested.