You may have seen recent discussion about the Government’s plans for an overnight visitor levy, sometimes called a tourist tax or holiday tax, for overnight stays in parts of England. As we work closely with our property owners and welcome guests from across the UK, we think it is important to explain what the Government has now decided, what details remain to be finalised, and what it could mean for those planning future holidays in the UK.
Understanding the Visitor Levy in England
At the moment, no visitor levy applies to overnight stays in England. However, following a consultation held between November 2025 and February 2026, the Government has now confirmed the main framework it intends to introduce.
Both Mayoral Strategic Authorities and Foundation Strategic Authorities will be given powers to introduce a local overnight visitor levy. The levy will remain discretionary, and each eligible strategic authority will decide whether to introduce one in its area. This means there will not be a single national charge applied automatically across England.
Before introducing a levy, a strategic authority will be required to carry out a local consultation and publish its final plans. The Government has decided not to prescribe a minimum national notice period before a levy begins. The amount of notice given to visitors and accommodation businesses could vary between areas.
What is a visitor levy?
A visitor levy is an additional charge connected to overnight accommodation. The Government has confirmed that the English levy will be calculated as a percentage of the accommodation cost, which will be set locally by the relevant strategic authority. Costs that do not relate to the accommodation, such as meals included within a package, should be excluded.
At present, the Government does not intend to set a national maximum rate. Rates may differ between separate strategic authority areas, however, authorities will not be able to vary the rate by season, accommodation type, or different areas within the same strategic authority. This is intended to provide some consistency.
The Government has said that the levy income should support local economic growth, which may include investment in the visitor economy, although the revenue will not be legally restricted to tourism projects. Strategic authorities will decide how the revenue is invested in line with their regional growth strategies. They will also be required to report annually on the amount collected and their spending decisions.
A few important technical details remain unresolved, including when the levy will be calculated, how refunds and cancellations will be handled, how costs will be divided where accommodation forms part of a package, and whether booking platforms may collect and remit the levy on behalf of property owners.
How could this affect visitors?
If a visitor levy is introduced in a particular area, visitors booking overnight accommodation in that location could pay a percentage-based charge linked to the accommodation cost. The amount will depend on the rate chosen by the relevant strategic authority and the cost of the stay. Different strategic authority areas may choose different rates, while some may decide not to introduce a levy at all.
The main impact would likely be an increase in the overall cost of holidaying in England. While the proposed individual charge may appear relatively small, the additional cost would make a difference. This matters because many UK holidays are booked by families and groups who plan carefully around a fixed budget. For example, a charge that looks modest on a single night may feel more noticeable over a longer stay, particularly when combined with travel, food, attractions, and other holiday costs.
It is also worth remembering that many overnight visitors in England are domestic travellers. That means any levy would often be paid by UK households choosing to holiday closer to home, rather than only by overseas tourists.
Classic Cottages' view
At Classic, we recognise that funding is essential to maintaining and improving the holiday destinations that visitors enjoy. Well-maintained public spaces, cultural attractions, transport networks and local services all contribute to a positive holiday experience. We are not opposed to investment in local destinations; however, we believe any visitor levy would need to be designed very carefully, with visitors and local tourism businesses clearly in mind.
First, affordability matters. Holiday homeowners and accommodation providers are already facing significant additional costs, many of which stem from recent policy and regulatory changes, including additional fire-safety requirements, the removal of the Furnished Holiday Lettings tax regime, and increased tax costs for some property owners, alongside wider pressures such as energy and employment costs. These increases affect the cost of providing holiday accommodation and, ultimately, the prices paid by visitors. We are particularly concerned that there will be no national cap on the percentage that can be charged. The rate will be determined locally, which could create significant differences in the cost of similar holidays in neighbouring destinations.
With many households already balancing accommodation, travel, food and activity costs, any further charge should be considered carefully so that holidays in England remain accessible, especially for families and visitors planning longer stays.
Secondly, bookings should remain simple and transparent. Visitors should be able to see clearly what they are paying, why they are paying it, and whether it applies in one destination but not another. Although the Government has chosen a single percentage-based calculation method, individual authorities will set their own rates and may apply certain local exemptions. This could still create a patchwork of different charges and rules across England.
Thirdly, if visitors are asked to contribute more, there should be clear transparency about how the money is used. The Government has decided that revenue may be used for wider economic-growth priorities and will not be restricted solely to the visitor economy. In our view, revenue should be reinvested directly and visibly in the visitor economy, with particular attention to the places where visitors stay and the services they use.
Finally, we believe any levy should be introduced only after careful assessment of its impact on tourism, local businesses and visitor behaviour. Small accommodation businesses play an important role in English tourism and already operate within a complex regulatory environment. Any new requirements and their impacts should therefore be properly considered and be as straightforward and proportionate as possible.
Accommodation providers will be legally responsible for calculating the levy, submitting self-assessed returns and paying the amount due to the relevant authority. This is a potentially significant new administrative responsibility, particularly for small and micro-businesses.
These concerns are not about opposing investment in local areas. Rather, they reflect the need to ensure that any new charge is fair, transparent and does not unintentionally discourage or constrain people from taking holidays in the UK.
What do we know for certain?
• The Government has completed its consultation and published its response on 10 September 2026.
• Both Mayoral Strategic Authorities and Foundation Strategic Authorities will be eligible for visitor levy powers.
• The power will be discretionary. Eligible strategic authorities will decide whether to introduce a levy in their area.
• The levy will be calculated as a percentage of the accommodation cost.
• Each strategic authority will set its own rate, and the Government does not currently intend to impose a national maximum rate.
• Accommodation providers will be legally responsible for calculating, declaring and paying the levy through a self-assessment process.
• Authorities will be required to consult locally before introducing or materially changing a levy.
What is still undecided?
Although the Government has now decided the main structure of the levy, some important details still need to be settled through legislation, guidance and further technical work. These include:
• The percentage rate that each strategic authority may choose to apply.
• When liability will arise and how cancellations, refunds, booking changes and no-shows will be treated.
• How the accommodation element of packages and inclusive bookings will be calculated.
• Whether booking platforms and other intermediaries will collect and pay the levy on behalf of accommodation providers.
• The detailed registration, record-keeping, return and payment arrangements.
• The compliance, enforcement and appeals process.
• How much notice each authority will provide before introducing or changing a levy.
• Which strategic authorities will introduce a levy and when their local schemes will begin.
It is therefore still not possible to say exactly what visitors will pay, where a levy will apply, or when individual local schemes will begin. The Government intends to legislate during the current Parliamentary session and, subject to Parliamentary approval, expects local leaders to be able to set out plans for investing levy revenue by March 2028. This does not mean that every area will introduce a levy, or that all levies will begin at the same time.
