England’s New Tourist Levy: What It Means for Visitors and Local Communities

Published on November 26, 2025

The United Kingdom government has recently permitted any mayor in England to implement a tiered policy by exercising the right to introduce a tourist levy in his or her municipality, in what can be termed as a significant policy change. Local policymakers in England will have the right to charge visiting tourists “modest” expenses, which will be used to support the local public sector service to transportation, infrastructure, and public services at the municipal level within the local policy.

The levy will be charged to tourists that will be staying in the municipality overnight and using hostelry services such as hotels, bed and breakfast, guest houses, and other lodging services. The integration of the policy within the municipality, will allow local policymakers to have increased financial autonomy to complement other services and benefits within the municipality from tourist flows.

Global Precedents: Why the UK is Following Suit

The concept of a tourist tax is not new and has been implemented successfully in other major cities around the world. Well-known tourism destinations like New York, Paris, and Milan already charge their visitors a tax to support infrastructure and public services that cater to the demands of an increasing number of tourists.

In addition to these international examples, a similar tourist levy will be introduced in Edinburgh starting July 2026. The success of these models has prompted calls from regional leaders across England, including London mayor Sir Sadiq Khan and Greater Manchester’s Andy Burnham, to introduce a similar system for their own cities.

The government’s decision to grant mayors the power to implement a tourist tax is seen as an important step in decentralizing decision-making and allowing local leaders to tailor policies to their city’s specific needs.

Sir Sadiq Khan’s Support for the Levy in London

London’s mayor, Sir Sadiq Khan, has strongly endorsed the move, emphasizing how the introduction of a tourist levy will benefit the city’s economy. “The extra funding will directly support London’s economy, and help cement our reputation as a global tourism and business destination,” Khan said.

The mayor also highlighted the positive implications for local businesses, noting that the funds generated by the tax will help boost infrastructure development, improve public transport systems, and enhance the overall experience for both residents and visitors. Khan’s statement underlined that local consultation will be a key part of the implementation process, with London’s hospitality and tourism sectors working together to ensure the levy is introduced in a way that benefits both tourists and the local community.

Impact on Tourists and Local Economy

The introduction of a tourist tax in major UK cities, including London, could have a substantial impact on how tourists experience the country. While the fee is described as “modest,” it will still add an additional cost for visitors who are already facing rising travel expenses. However, the government argues that research shows the impact of such fees on visitor numbers is typically minimal, suggesting that tourists are unlikely to be deterred by the additional charge.

For the local economy, the funds raised by the levy could be a much-needed boost for public services and infrastructure projects. With millions of tourists visiting UK cities every year, the tax could bring in significant revenue that can be reinvested in areas such as public transport, urban development, and maintaining local attractions. This revenue could be especially crucial as cities continue to recover from the financial pressures of the COVID-19 pandemic, which severely impacted tourism.

Controversy and Opposition from Hospitality Sector

Despite the potential benefits for local economies, the tourist tax proposal has been met with criticism from some quarters, particularly within the hospitality industry. UKHospitality, a prominent trade association representing the UK’s hospitality sector, has described the move as a “shocking reversal.” This criticism comes just months after the tourism minister publicly stated that the government had “no plans” to introduce a tourist tax.

Kate Nicholls, the chair of UKHospitality, voiced concerns that the new levy would lead to increased costs for working families. She predicted that the tax could cost consumers up to £518 million in additional expenses, putting further financial strain on those already facing higher living costs. Nicholls also argued that this levy would effectively increase the rate of VAT for UK tourists, potentially making it one of the highest tax rates for consumers in Europe.

Furthermore, the hospitality sector fears that the tourist tax could lead to a rise in prices for travelers, making the UK a less attractive destination for international visitors. Critics worry that the increased costs may deter tourists from visiting the UK or result in fewer long-term stays, which could harm the broader tourism industry.

Government’s Justification for the Levy

While opposition from the hospitality industry is significant, the government stands by its decision, citing research that suggests reasonable tourist taxes have minimal impact on the number of visitors. Housing, Communities, and Local Government Secretary Steve Reed argued that the new powers granted to mayors would enable them to harness the revenue generated from tourism to fund vital local projects.

“Tourists travel from near and far to visit England’s brilliant cities and regions,” Reed said. “We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come.” The government believes the tourist levy is an important tool for ensuring that tourism benefits extend beyond the private sector and into broader community development.

Consultation and Next Steps

The government has launched a public consultation on the proposed tourist tax, which will run until February 18, 2026. This consultation process will give stakeholders, including local businesses, tourism professionals, and the public, the opportunity to provide feedback on the planned levy. The government aims to use this feedback to refine the proposal and ensure that the implementation of the tax is both fair and effective.

In the meantime, major cities like London, Greater Manchester, and others are already preparing to discuss how the levy will be implemented and how funds will be allocated to benefit their local communities. If the proposal moves forward, it could set a new precedent for tourism management in the UK, with a more localized approach to funding public services and supporting the needs of residents and businesses alike.

A New Era for Tourism in England

In England’s major metropolitan areas, the United Kingdom’s policy shift that delegates the authority of regulating tourism to the mayors as well as elected council members of the local governments in England represents the first of its kind in the entire United Kingdom, as England’s local councils have never been in charge of the tourism industry. The Governance and Oversight of England’s local councils and England’s mayors have resulted in England as a whole being able to have a more effective and localized tourism governance, and with every council representing a local community, there is now a local community democracy tourism governance across the United Kingdom. With the stakeholders and the general public controversy centered around the tourism tax proposal, most believe it can strengthen local communities. With the public consultation ongoing, there is great anticipation about the outcomes that may dictate the future of tourism across England.