A group of ten Labour regional mayors in England has committed to capping a proposed visitor accommodation levy at 5%. The pledge follows industry warnings that an uncapped tax could threaten jobs and increase the cost of family holidays.
The proposed legislation, which would grant local leaders the power to implement a visitor charge on hotels and other overnight stays, is intended to generate revenue for local transport and high street improvements. In a letter addressed to Chancellor John Healey and Local Government Secretary Angela Rayner, the Labour mayors described the 5% limit as a “reasonable ceiling” that balances the need for local investment with the necessity of preventing excessive costs for travelers.
The hospitality sector has expressed significant opposition to the policy. Allen Simpson, chief executive of the trade body UKHospitality, warned that the levy could add between £100 and £120 to the cost of a family vacation, potentially forcing some holiday parks to close during off-peak seasons. Conservative shadow housing secretary David Simmonds criticized the proposal as a “double whammy,” noting that it would be applied on top of the existing 20% VAT on hotel stays.
While the government intends to introduce a bill to Parliament to establish the levy, political reception remains divided. Reform UK leader Nigel Farage stated that his party’s mayors would not implement the tax, and several other regional leaders have signaled their opposition or caution. Current voluntary schemes, such as those in Manchester and Liverpool, operate on a business-led basis, but the new government proposal would grant mayors formal powers to mandate the charge.
The government has indicated that it aims to protect budget-friendly travel by ensuring low-cost accommodation is subject to the lowest levies. Local authorities will be required to clarify their plans for reinvesting the revenue by early 2028, with the option to provide exemptions for certain types of accommodation, such as campsites.
Source: BBC News
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