UK Mayors to Gain Uncapped Tourist Tax Powers

The UK government is moving ahead with plans to grant regional mayors in England statutory powers to levy uncapped tourist taxes on hotels, short-term rentals, and overnight accommodation [1]. Legislation will arrive before parliament within months, permitting individual metro mayors to determine whether to introduce charges, decide their structure, and set rates without a national upper limit [[1], [2]].

What powers will English mayors receive under the legislation?

Individual regional mayors across England will receive legal authority to decide whether to introduce a local visitor levy and how that charge should operate across their territories [1]. According to Boutique Hotel News, the proposed regime covers traditional hotels, holiday lets, and short-term rentals [1]. In a distinct shift from earlier proposals, the central government will not impose a national cap on the rates that regional leaders can implement [[1], [2]]. Housing secretary Angela Rayner presented details of this framework to regional mayors during a meeting in Manchester [1]. While primary legislation is slated to enter parliament within months, powers will not take immediate effect; local leaders will outline how levy revenues are to be spent by March 2028 [[1], [2]].

How will local authorities collect and spend the revenue?

Collected levy funds will remain directly within the host region rather than returning to central government coffers [1]. Regional authorities will allocate these funds toward public transport networks, tourism infrastructure, cultural venues, and local municipal services [[1], [2]]. Structure decisions will reside at the mayoral level. In London, the mayor's office favours a percentage charge applied to accommodation costs over a flat nightly fee [1]. Sources from the London mayor's office confirmed that while final operating structures remain open, any future levy introduced in the capital would not exceed five per cent [[1], [2]].

What economic impact do industry leaders project?

Trade bodies strongly oppose the absence of an upper ceiling on local accommodation charges [1]. As shorttermrentalz.com reported, holiday rental businesses raised early alarms that variable tax regimes across neighbouring council boundaries will distort customer demand and produce administrative uncertainty for operators [2]. Trade organisation UKHospitality projects severe economic consequences from widespread adoption [1].

A standard five per cent accommodation tax applied across England would eliminate 33,000 hospitality jobs and wipe £2 billion from national economic activity, according to calculations published by UKHospitality [1]. Trade representatives note that destinations reliant on seasonal tourism and businesses operating across off-peak shoulder periods face heightened commercial risk [[1], [2]]. In February 2026, 200 hospitality executives formally petitioned the UK government to abandon the levy entirely [1].

How do the proposals compare to existing UK visitor levies?

Decentralised tourism charges already function or have secured statutory backing across other sections of the United Kingdom [1]. Manchester introduced the nation's inaugural local tourist levy structure in 2023 [1]. North of the border, Edinburgh instituted a five per cent visitor charge in July [[1], [2]]. In Wales, local councils hold statutory approval to collect £1.30 per person per night from overnight visitors starting in April 2027 [[1], [2]]. The upcoming English bill broadens this regional taxation model across city regions, pending formal parliamentary approval [[1], [2]].