Is a tourist tax on the cards? How businesses are pushing back

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Proposals to introduce a visitor levy across England have faced backlash from the hospitality and leisure sector.

More than 200 industry leaders wrote to the Chancellor to raise their concerns, including major accommodation providers such as Butlins, Haven, Hilton and Travelodge.

It seems their message was clear and that “holidays are for relaxing, not taxing”.

As the school half-term falls amongst us, businesses are questioning the impact of a tourist tax on their finances and customer demand.

What is the UK tourist tax being proposed?

Under proposals announced in the Autumn Budget 2025, mayoral authorities in England could gain the power to introduce a visitor levy on overnight stays.

The levy would apply to hotels, B&Bs, guesthouses, short-term rentals, campsites and other paid accommodation.

Often referred to as the tourist tax, the levy would apply to leisure and business travellers.

However, any businesses that benefit from tourism and holidaymakers could feel the impact, even though they themselves are not taxed.

Councils have defended the proposal and argued that the funds raised could support local infrastructure, public services and tourist development.

What charges are already in place in the UK?

While visitor levy consultations remain ongoing in England, some cities already have local schemes in place.

This includes:

Manchester implemented a £2 per night charge in 2023, raising £2.8 million in its first year.
Liverpool followed in June 2025 with a £2 nightly fee, expected to generate £4.5 million annually.

In Scotland, the Visitor Levy (Amendment) was introduced to the Scottish Parliament in January 2026. Its rollout could provide an early indication of how effective a tourist tax would be in the UK.

Why are businesses opposed to the tourist tax?

In their letter to the Chancellor, industry leaders warned that a visitor levy could increase the cost of a typical two-week UK family holiday by £100 or more.

They argued that this may force families to shorten their trip, reduce spending in local establishments or encourage travel overseas instead.

The letter also stressed that fewer visitors could mean fewer jobs. This could have a knock on effect on a range of sectors that rely on tourism, including retail, entertainment, transportation, real estate and agriculture.

New research from VisitBritain/ VisitEngland found that tourism is worth £147 billion annually to the UK, about five per cent of the national economy and supports about 2.4 million jobs.

The sector is already under pressure from rising costs, increasing employment wages, higher business rates and VAT at 20 per cent, which is higher than many European competitors.

Industry leaders concluded that introducing a levy could contradict the Government’s aim to grow the economy and back British businesses.

What could a tourist tax mean for your business?

If a visitor levy were introduced in your area, this could affect your: