Families face paying extra £100 on UK holidays in new Budget tourist levy affecting hotels and holiday parks
UK holidays could soon get much more expensive after new overnight tourist tax rules were announced in today’s Budget.
Prime Minister Andy Burnham has opened the door to the ‘tourist tax‘ which will impose an extra charge for families on a staycation – and it could cost families an extra £100.
Set out in the Autumn Budget, Andy Burnham once again spoke about what’s officially called the ‘overnight visitor levy‘ which is set to be in place by 2028.
It would allow local authorities in England to charge visitors an additional fee on overnight stays at hotels, B&Bs, holiday lets and even holiday parks.
The fee would be officially uncapped – however, Labour’s regional mayors in England have pledged to cap a it at five per cent.
According to UK Hospitality, it could still add up to £100 to a two-week family stay based on £2 per person per night.
The money gained by the tax would be invested back into local communities and infrastructure.
Talking about the levy, Jon Hendry Pickup, CEO of Butlin’s said: “The Government still hasn’t explained how a Holiday Tax will work in practice or whether it will actually achieve that objective.
“If local areas are going to retain significantly more business rates revenue, alongside a share of income tax, the case for adding another tax on British families taking a holiday in their own country becomes even harder to understand.
“We’ve consistently warned that making UK destinations more expensive risks deterring the very visitors whose spending supports local economies.
“Giving regions the power to invest can have a positive impact, but it shouldn’t come at the expense of UK families booking a holiday.”
However, there are ways to get round the visitor tax, as some places might not implement it at all.
England is split into 14 regions with different mayors looking after each – and the tourist tax will be added at their discretion.
It’s likely that all Labour mayors will add the tax, and some of the places where there is support are Greater London, the West Midlands, Liverpool City Region, Greater Manchester, West Yorkshire, South Yorkshire, York and North Yorkshire and the North East.
Cities within those regions like Birmingham, Leeds, Manchester and Newcastle are likely to introduce the extra charge – as are surrounding towns.
However, where there are Reform UK and Conservative mayors, the levy may not be introduced at all.
For example, Dame Andrea Jenkyns who is the mayor of Greater Lincolnshire has said that she won’t be introducing a tourism tax as it could “drive out” people from visiting the region.
Conservative Mayor of Tees Valley Ben Houchen also ruled out introducing any tourist tax last year.
Paul Bristow, the Mayor of Cambridgeshire and Peterborough, wrote on X that “this is not the time to put extra costs on staying overnight in #Cambridgeshire and #Peterborough.”
Meanwhile, there’s a question mark on the places that do not have an elected regional mayor – for example Cornwall which draws in thousands of visitors every summer.
Cornwall does not have a mayor for the whole county, but is looking for a way to set up a foundation strategic authority (FSA) – this could be set up by 2028.
Where the levy is introduced could also change depending on local elections and if the ruling party switches.