The UK government is considering introducing a new “tourist tax” for visitors staying overnight in London, a move officials say could raise hundreds of millions of pounds annually but has sparked criticism from the hospitality sector.
According to reports in the BBC, Chancellor Rachel Reeves is preparing legislation that would give mayors across England the authority to impose a levy on tourists staying in hotels, guest houses and Airbnb properties. The proposal, if approved, would align London with major global cities such as Paris, Munich, Milan, Toronto, New York and Tokyo, where similar charges已经exist.
Move aimed at boosting revenue
Government estimates suggest that the levy could generate up to £240 million a year, based on London’s nearly 90 million overnight stays recorded in the latest evaluation.
A 2017 analysis by the Greater London Authority (GLA) found that a £1-per-night charge could bring in £91m annually, while a 5% levy could raise as much as £240m.
City leaders argue the funds could support public transport, city services and tourism management, especially as London prepares for the influx of Christmas and New Year holiday travellers.
A spokesperson for Mayor Sadiq Khan said the mayor believes a “modest tourist levy” would help strengthen London’s economy and maintain its reputation as a global destination.
Hospitality sector warns of impact
However, the proposal has triggered strong pushback from the hospitality industry.
Kate Nicholls, Chief Executive of UK Hospitality, described the idea as “shocking,” warning that the tax would unfairly burden British families and deter both domestic and international tourists.
“Overseas visitors are incredibly important to central London, and across London as a whole,” she said. “This will have a really big impact on British consumers… it’s a tax on hard-working families enjoying a short break.”
Nicholls also highlighted that the UK already has one of the highest VAT rates in the tourism sector among G7 countries.
“If we tax people out of coming to London, we will tax the London economy out of jobs, growth and investment,” she cautioned.
Risk of drop in visitors
A new briefing from the think tank Centre for Cities, commissioned by the GLA, concluded that London could “see a massive drop in visitors” if it adopts a levy comparable to other major cities.
Despite this, supporters of the tax believe the revenue boost outweighs the risks, especially amid rising transport costs, government budget pressures and strain on public services.
