New Tourist Tax Proposals Could Raise Costs for Visitors to the United Kingdom

Published on December 5, 2025

The United Kingdom has proposed new taxes on overnight stays, which could make visiting the country more expensive. Local authorities across England, including cities like London and Manchester, are considering implementing a new charge on accommodations such as hotels, guesthouses, bed and breakfasts, and holiday rentals. This move comes as part of an effort to bolster local infrastructure and public services.

The UK government is backing these proposals, which would allow mayors across England to introduce the tax in their respective regions. The funds generated from this levy would be invested into vital civic projects such as transportation, public infrastructure, and community services. While the proposed tax is still undergoing a consultation phase, it is likely to have a significant impact on both the UK’s tourism sector and the budget of visitors.

How the Proposed Tourist Tax Could Affect UK Travel Costs

The new tax, if approved, would increase the cost of staying at various types of accommodation, including hotels, holiday rentals, and other short-term stays. While the exact rate of the tax has not yet been finalised, it will vary depending on the local municipality. The proposals aim to give local councils the financial resources they need to improve services and infrastructure, but they also come at a time when the UK is already a costly destination for international travellers.

The strength of the British pound against currencies like the US dollar has already made the UK one of the more expensive places to visit. For many tourists, these new taxes could push the cost of their stay even higher, particularly in popular cities like London and Manchester. For example, in cities like New York, Paris, and Milan, similar tourist taxes have been successfully implemented, raising funds for civic improvements while having minimal impact on visitor numbers.

What Is the Purpose of the New Tourist Tax?

The primary goal behind the new tourist tax is to give local governments more control over funding for projects that directly impact tourists and residents. According to Steve Reed, the UK Secretary of State for Housing, Communities and Local Government, the new tax will allow local leaders to invest in areas that are crucial for both tourism growth and community development. This includes improving transport systems, expanding infrastructure, and supporting long-term regional growth.

The UK government’s press release points out that evidence from cities with similar taxes shows that reasonable fees have a minimal impact on visitor numbers. In fact, with more than 130 million overnight visitors to England each year, these proposed taxes are not expected to reduce tourism in major cities or areas of high interest.

Edinburgh Leads the Way: A Look at Scotland’s First Tourist Tax

Scotland’s Edinburgh became the first UK city to charge a tourist tax, introducing the overnight stay fee earlier this year. This early adoption may serve as a model for other UK cities considering the new tax. Edinburgh’s initiative has been widely discussed and studied as other regions assess whether a similar levy would benefit their communities.

While Edinburgh’s new fee is designed to help fund tourism-related services, such as improving the local transport network and ensuring sustainable tourism development, it remains to be seen how other regions will adopt or adapt similar charges. The consultation phase for the UK’s proposed tax will last until February 2026, after which the decision will be made as to whether or not it will be rolled out across other cities and regions.

How Local Authorities Can Decide on the Tax

The new tax will not be applied uniformly across all cities. Instead, local mayors and councils will have the power to decide whether it is right for their area. The tax will be optional, with each municipality determining if it aligns with local needs and priorities. This means that some tourist destinations in the UK could see the tax implemented sooner than others, depending on local government decisions.

As it stands, this tourist tax proposal is still in its consultation phase, allowing local leaders, tourism operators, and citizens to provide feedback. The consultation process is expected to conclude in February 2026, after which the government will review the feedback and make decisions about the next steps.

Impact on Travellers and the Future of UK Tourism

As the UK government moves forward with the proposed tourist tax, it is clear that the country’s tourism landscape could change in the coming years. While the tax aims to generate additional funds for critical civic projects, it could also push up the cost of travelling in certain areas. However, with evidence suggesting that modest taxes have minimal effects on visitation numbers, travellers can expect little disruption to their experiences in popular cities like London, Manchester, and Edinburgh.

Ultimately, this new tax proposal offers local governments the tools they need to enhance their cities’ infrastructure and services. For tourists, it will be important to factor in this additional cost when planning a visit to the UK, especially in destinations where the tax has been implemented.