The UK is moving towards a system of local tourist taxes, with the Overnight Visitor Levy Bill announced in the King's Speech on 13 May 2026. If passed, mayors in England will gain powers to charge a levy on overnight stays, similar to existing schemes in Scotland and Wales.
Edinburgh will become the first UK city to legally enforce a visitor levy from July 2026, with Wales following by 2027. Meanwhile, Manchester and Liverpool have already introduced a form of tourist tax through Accommodation Business Improvement Districts (ABIDs), a legal workaround.
The levy, typically a small fee per room per night (e.g., £2), is collected by hotels and rental properties on behalf of local authorities. Funds are reinvested into local infrastructure and services. Exemptions may include children, medical travellers, and domestic violence victims.
Supporters argue the levy addresses fiscal devolution gaps: the UK collects only 5.8% of taxes at sub-national level, the lowest in the G7. Mayor of London Sadiq Khan said the power “is great news for London,” while West Yorkshire Mayor Tracy Brabin called it “the first step toward fiscal devolution.”
Critics note that the term “tourist tax” can be misleading, as business travellers are also liable. The charge may be a flat rate per night or a percentage of the accommodation cost, varying by local authority.
