AVS asks…
How does your institution feel about this?
What are your thoughts?
It is widely accepted in Europe already, is this something we will need to just adjust to and will you need to pass this cost on?
Let’s open up the discussion!
More information can be found here
At its core, the proposal would allow Mayoral Strategic Authorities to charge a small levy on overnight accommodation, with no obligation to introduce one. Central government would set the framework, but decisions on whether to implement a levy, the rate, scope, and use of funds would sit locally and be subject to consultation and democratic oversight.
The rationale is threefold. First, England is highly centralised compared with international peers, limiting local investment capacity. Second, tourism places pressure on local infrastructure and services that are largely funded by residents. Third, visitor levies are widely used internationally and elsewhere in the UK (notably Scotland and Wales) with evidence suggesting modest levies have limited impact on demand.
Use of revenue is intentionally broad but growth-focused. Funds could support transport, regeneration, public realm improvements, cultural and sporting events, destination marketing, skills and workforce development, and visitor infrastructure. Revenues could be used for both capital and revenue spending. The Government is consulting on whether a guaranteed share should flow directly to constituent local authorities to reflect service pressures at local level.
The proposed scope is wide. All types of commercially let overnight accommodation would be included by default: hotels, B&Bs, self-catering, short-term lets, campsites, serviced apartments, and university accommodation let commercially during vacations. Stays that are a person’s main residence, private stays with friends or family, and certain forms of non-commercial or statutory accommodation would be excluded. A small number of national exemptions are proposed, with limited scope for additional local exemptions.
On rates, the Government’s preferred model is a percentage-based levy applied to the cost of accommodation, rather than a flat per-night fee. This is considered fairer and more flexible, as higher-cost stays would contribute more. Local leaders would set rates following consultation, potentially within a national cap. There is also consultation on whether the levy should apply only for a capped number of nights per stay.
Responsibility for collection and liability would sit with the accommodation provider, operating on a self-assessed basis. Providers could pass the cost on to guests (as is common internationally), but this would be a commercial decision. The proposed tax point is the date of arrival, ensuring charges reflect actual stays rather than cancelled bookings.
The document places strong emphasis on transparency and accountability. Before introducing a levy, authorities would need to publish a prospectus, undertake formal consultation, provide at least 12 months’ notice, and publish annual reports on income and expenditure. Different consent mechanisms are proposed depending on whether the authority has a directly elected Mayor.
Finally, the consultation seeks views on administration models, ranging from local authority-led collection to more centralised or shared systems, and confirms that a small proportion of revenue could be retained to cover administration costs.