Overnight Visitor Levy: what we know so far
Will new tax be applied in Suffolk and Norfolk
On 10 September 2026, the government announced it would give Mayors in England new powers to introduce a visitor levy, or ‘tourist tax’. As of September 2026, English local authorities do not have the power to introduce such levies. Some UK local authority areas, such as Liverpool and Manchester, have used workarounds based on business improvement district structures.
The government consulted between 26 November 2025 and 18 February 2026 on the design of a new power for English strategic authorities to introduce overnight visitor levies. The 2026 King’s Speech announced that an Overnight Visitor Levy Bill (PDF) would be introduced during the 2026–27 parliamentary session. This bill has not yet been introduced.
The Suffolk and Norfolk LVEP conducted a simple survey for accommodation providers and 35 of 36 responders said they did not want an Overnight Visitor Levy.
Visitor Levy Consultation: Government response
The Scottish and Welsh parliaments both passed legislation permitting their local authorities to introduce a visitor levy. Edinburgh became the first Scottish council to implement a levy. Its 5% visitor levy applies to qualifying stays from 24 July 2026 onwards and is charged on the first five nights of a stay.
Labour Mayors in England vow to cap tourist tax at 5%
Who would pay a visitor levy?
The government suggests that a visitor levy set by English mayors would apply to hotels, guesthouses, bed and breakfasts, hostels, campsites, self-catering properties, and short-term lets, and university and religious accommodation when let commercially. Moving vehicles and care homes would not be covered. Traveller sites, temporary accommodation for homeless persons, and stays in “non-profit accommodation provided for shelter, respite, or refuge” would be exempt.
The levy would be set as a percentage of the price of the accommodation. Scotland’s original statutory model also used a percentage, but the Visitor Levy (Amendment) (Scotland) Act 2026 now allows Scottish councils to choose either a percentage-based levy or a fixed-amount model.
The Welsh visitor levy is a flat rate, which Welsh councils may choose to introduce or not.
VAT would be payable on the total cost of the overnight stay, inclusive of the levy. This is because the accommodation provider, not the visitor, is required to pay the levy.
Mayors would be able to set local exemptions. They would also be able to choose to set a visitor levy in some of their local authority areas but not others, subject to the consent of the local authority in question. Members of the combined authority would be able to reject a levy on a two-thirds majority.
The consultation asks for views on whether a national cap should be applied on the number of consecutive nights for which a levy can be charged. That is, any stay for longer than (for example) 14 nights would be charged a visitor levy for only 14 nights. In Wales, any ‘visit’ longer than 31 nights does not come within the scope of the levy system.
What would mayors do with the money?
Some initial estimates of the likely revenue from a visitor levy have been published. The BBC suggested that a £1 per night levy in London could raise £91 million per year. Figures suggested for other areas include £11 million for Liverpool City Region; £8-40 million for Greater Manchester; and £52 million for York and North Yorkshire. These figures should be treated with caution before further details of the levy are known.
The consultation proposes that English mayors could spend revenue from the levy on “broader initiatives which have a positive impact on the region’s economic health”. This is a broader use of the revenues than is permitted in the Scottish and Welsh visitor levy systems, which require revenues to be spent on matters related to the visitor economy and destination management.
The government also states that mayors should be able to distribute the revenues to local authorities, and asks whether this should apply to a minimum share of the revenue from the levy.
The government said that:
Mayors will be empowered to deliver more long-term, locally led investment in transport, regeneration and cultural assets that can unlock growth and make places more attractive for residents, businesses and visitors. The Government will not compel any Mayor to introduce this levy, nor will central government reduce funding for Mayors if they decide to do so. (MHCLG / HM Treasury, Overnight visitor levy in England, 2025, p49)
How would mayors set a visitor levy?
Mayors would have to publish a prospectus and undertake a formal public consultation before introducing a levy. The prospectus would include proposed rates, areas, and use of the revenues. This reflects similar requirements in Scotland and Wales. It is also similar to legal requirements for the introduction of a business improvement district.
The government asks whether, in addition to English mayors, foundation strategic authorities (FSAs) should be permitted to establish a visitor levy. The English Devolution and Community Empowerment Act 2026 subsequently established the statutory framework for strategic authorities.
What happens next?
If the government decides to introduce a visitor levy for English mayors (or other local authorities), primary legislation will be required.
This is likely to be through the Overnight Visitor Levy Bill (PDF) that was promised in the 2026 Kings Speech on May 13, 2026. This bill has not yet been introduced.
Tourism Alliance response
Eddy Leviten, Executive Director of the Tourism Alliance, said: 'Businesses and families need certainty on what they'll actually pay, and a mayor with no ceiling on the rate can't offer that. Scotland's experience is a month old and already shows the administrative cost of getting design wrong, businesses there are correcting bills by hand at real cost. This carries a real risk of harming the visitor economy instead of strengthening it.
'Government needs to commission a sector-specific impact assessment, set one national framework rather than leaving mayors to set their own rates and rules and ring-fence every pound raised for the visitor economy that raised it. We need a workable design developed in conjunction with business.'
The Tourism Alliance will continue to press government on:
- Sector-specific impact assessment, commissioned now and acted on.
- Administrative simplicity that works with how booking platforms actually process payments.
- One national framework, not local authorities setting their own rates and rules.
- A fixed VAT interaction, so levy income doesn't count towards the VAT registration threshold.
- Ring-fenced revenue and empowered public-private forums.
Tracking wider spending impact, not just what the levy raises directly.
Frequently asked questions
- What is an Overnight Tourism Levy (OVL)?
The Overnight Visitor Levy, also known as a 'Tourism Tax', is a local tax on overnight stays in accommodation, designed to raise revenue for local mayoral authorities to invest in tourism, infrastructure, and public services.
- What is the cost to a visitor of an Overnight Visitor Levy?
The charge can be a flat rate for the entire duration, or a series of flat rates, for example, £2 per room per night or £2 per person per room per night. It can also be set as a percentage of the nightly fee, as Edinburgh are doing.
- Did the government do an economic impact assessment before bringing forward legislation on an Overnight Visitor Levy?
The Treasury has admitted that despite the Government introducing enabling powers for an England Overnight Visitor Levy in the King’s Speech, they did so without economic modelling of impacts on jobs, growth, tax receipts or tourism demand, and without assessing alignment with its target of welcoming 50 million international visitors by 2030.
Ministers will instead rely on the Future of UK Tourism inquiry and limited international VAT comparisons made ahead of the consultation.
The Future of UK Tourism inquiry was launched by the Department for Culture, Media and Sport on April 9, 2026, and ended on May 18, 2026.
- Will Norfolk and Suffolk have a Tourism Tax?
A Suffolk and Norfolk Mayor, currently due to be elected on May 4, 2028, will have the power to implement the tax.
Mayors and local leaders will decide whether to introduce a levy. As part of that process, they will be required to consult and consider the impacts on businesses and others.
Conservative leader Kemi Badenoch has said the Conservatives won’t introduce an OVL in their Mayoralties or authorities.
- Will Airbnb be included in an Overnight Visitor Levy?
Yes, short-term lets, such as Airbnb-type accommodation, are intended to be included within the taxable accommodation base for the Overnight Visitor Levy (OVL). However, obtaining robust data on STLs may be a separate challenge.
The Short-Term Lets Registration Scheme is a separate regulatory initiative created under the Levelling Up and Regeneration Act 2023, aimed at providing better data on the location and scale of short-term lets. So while these are distinct policies, they are likely to interact in practice.
- Do other countries have Overnight Visitor Levies?
It’s something you might have spotted in Paris, Barcelona or Amsterdam: an extra fee, added to your nightly accommodation bill. They are typically very small – in France, the amount starts at 50p per night.
- Are there Overnight Tourism Levies in the UK?
Yes, Edinburgh implemented an Overnight Tourism Levy in July, 2026.
The Edinburgh Visitor Levy is a 5% charge on the cost of paid overnight accommodation within the City of Edinburgh Council boundary.
The charge applies to the first five consecutive nights of any stay, and the full 5% is calculated before VAT is applied.
The income generated from the levy will support public services, cultural programmes, and city infrastructure, benefiting both visitors and residents.
Glasgow will have a 5% overnight accommodation levy from 25 January 2027. Aberdeen will have a slightly higher levy of 7% on overnight stays from 1 April 2027.
Following on from Scotland, Wales will also start doing the same by 2027.
In Wales, visitors to campsite pitches, hostels and dorms will pay 75p per person, per night, while all other types of visitor accommodation will have a £1.30 charge per person per night.
- Are there Overnight Tourism Levies in England?
The Government plan is for Mayors to implement the Overnight Visitor Levy but Manchester and Liverpool Accommodation Business Improvement Districts (ABID) have already applied a fee to overnight stays.
The Liverpool BID Company introduced a £2 per night charge for overnight stays in hotels and serviced apartments within the city. The revenue generated from this charge will be used to develop and promote tourism in Liverpool, create more things for visitors to do and see, and support various projects including public realm improvements, destination marketing, major events and attracting more conferences.
The charge is administered by the hotels and serviced accommodations, either at check-in or check-out, and is managed by the Liverpool BID Company, which oversees the use of the funds.
Manchester was the first UK city to impose a 'tourist tax', £1 per room per night, in 2023. It raised £2.8m in the first year and revenue is used to fund extra street cleaning and other council-run services.
- What would Tourism Tax money be spent on?
The Government have said it will be up to Mayors.
Crucially, no Mayoralty that says it’s in favour has said the money will be ring-fenced for tourism.
Some argue that OVL money could be used to improve public realm infrastructure that will help tourists and locals, like roads.
Andy Burnham, when Mayor of Greater Manchester, commented in November 2025: 'The levy will allow us to invest in the infrastructure these visitors need, like keeping our streets clean and enhancing our public transport system through later running buses and trams.'
The Liverpool ABID have said that OVL revenues will be spent on marketing or developing events to attract visitors, encouraging return visits. They are currently focused on attracting business events mid-week to support quieter times.
- Who is against the Overnight Visitor Levy?
Trade body UKHospitality have said that the Overnight Visitor Levy is a 'shocking U-turn' by the Government. In September 2025, Minister for Business and Trade Chris Bryant said that there were 'no plans' to introduce such a levy.
Following the King’s Speech, Allen Simpson, Chief Executive of UKHospitality, said: 'The Government has confirmed it will legislate to make family holidays more expensive during a cost-of-living crisis.
'It’s a shocking U-turn after it told both the House of Commons and UKHospitality that it would not implement a holiday tax.'
Luke Petherbridge, director of public affairs at travel and tour association Abta, said: 'British travel and tourism is already uncompetitive on cost grounds and a visitor levy further adds to this.'
Oxford Economics modelling of OVL suggests reduced visitor demand, lower tourism spending, and negative knock-on effects for the wider economy.
The Tourism Alliance has argued that the UK is now 113th out of 119 countries for price competitiveness.
- Should ABIDs or Mayors levy the Tourism Tax?
Bill Addy, CEO of Liverpool BID Company, has argued that local ABIDs are preferable to a nationwide law: 'We believe a model where the private sector can invest directly into visitor economy support is the better model. Tourists are used to city charges; ours is a minimal, fixed fee that is easily communicated and absorbed. We are not using it to deter tourists, so that’s important to us.'
'Business Improvement Districts have to be accountable and transparent, and it means we can share the details of investment. It also allows for a hyperlocal approach that is both flexible and reactive,' he said.
The Government plan is for Mayors to levy the tax.