Mayors to be given power to impose tourist tax

Mayors will decide the percentage and how to invest the revenue raised.

Plans to give England’s mayors the power to introduce a tourist tax will be set out on Thursday.

The levy will be set by local leaders and charged as a percentage of the cost of accommodation to overnight visitors, rather than a flat fee, which the Government argues will protect budget holidays.

Housing, Communities and Local Government Secretary Angela Rayner will meet with mayors in No 10 North before further details of the policy are announced on Thursday.

It is understood the levy would in theory have no upper limit, though Government sources said mayors were unlikely to make it too costly in order to protect the local tourism industry, with most indicating it would be a few per cent.

Plans for the tax were first announced under Sir Keir Starmer, following similar schemes introduced by the devolved governments in Scotland and Wales.

Charges of a similar nature already exist across Europe, with the revenue used to fund local services. Mayors would decide how to invest the money raised from the levy.

But groups representing the tourism trade have warned about the impact of the levy and called for consistency in how the tax operates across different region.

UK Hospitality has meanwhile written to Prime Minister Andy Burnham urging him to consider plans for a “holiday bonus” instead, as households continue to struggle with the cost of living.

A Government source said: “We have always been clear that while central government will set the framework for this power, it will be up to local leaders and local voters to decide what is right for their area.”