The New Overnight Visitor Levy, What It Means for Hospitality

Client Note: The New Overnight Visitor Levy — What It Means for Hospitality

Date: 10 September 2026

Jurisdiction: England

Audience: Independent hotels, B&Bs, holiday-let operators, restaurants, bars and pubs

Executive summary

On 10 September 2026, the Government confirmed its policy direction for an Overnight Visitor Levy

in England.

The proposed levy would give Mayors and Foundation Strategic Authority leaders a discretionary

power to introduce a charge on qualifying overnight stays in their areas. The levy would be calculated

as a percentage of the accommodation cost, rather than as a fixed amount per night.

There is currently no national cap on the levy rate. The power is discretionary: an area would not

have to introduce a levy, and any local levy would require further local consultation and implementa-

tion steps.

This announcement is not yet law. A Bill is expected to be introduced in due course. No levy is cur-

rently payable by guests or accommodation providers under this new framework.

What has been announced?

The proposed framework would allow eligible local leaders to:

• decide whether to introduce an Overnight Visitor Levy;

• set the local levy rate, subject to the eventual statutory framework;

• apply the levy to qualifying overnight accommodation;

• determine or propose local exemptions;

• consult residents, businesses and other affected stakeholders before implementation; and

• use the proceeds to support local priorities, including infrastructure, transport and the visitor

economy.

The Government’s preferred approach is a percentage-based charge linked to the cost of the ac-

commodation, rather than a flat amount per guest or per night.

The percentage model is intended to be more proportionate between different types of accommoda-

tion. However, it also means that the amount paid by a guest could vary according to the price of the

booking.

Which accommodation could be covered?

The proposed scope includes commercially let visitor accommodation, such as:

• hotels;

• guesthouses and B&Bs;

• holiday parks and similar visitor accommodation;

• holiday lets; and

• other short-term rentals offered commercially.

The framework is not intended to cover every form of accommodation. The Government has identi-

fied exclusions including:

• temporary accommodation;

• shelters and refuges; and

• other accommodation serving emergency, protective or public-interest purposes.

Local leaders may also be able to create additional exemptions or exclusions, potentially including

certain campsites or other accommodation types, depending on the final statutory framework and lo-

cal policy.

Operators should not assume that an accommodation category is definitely included or excluded un-

til the Bill, regulations and local scheme rules are published.

Who collects and pays the levy?

Under the proposed approach, the accommodation provider would generally be responsible for

collecting the levy from the guest and remitting it to the relevant strategic authority or may-

oral authority.

The Government has indicated that the compliance framework should be simple and proportionate.

The final arrangements may address:

• when the levy must be collected;

• whether it is collected at booking, check-in or check-out;

• how it must be shown on booking confirmations, invoices and receipts;

• how cancellations, refunds, discounts and packages are treated;

• how online booking platforms and intermediaries may assist;

• registration and reporting requirements;

• record-keeping and audit requirements; and

• whether providers receive any contribution towards administration costs.

Until the detailed legislation and guidance are published, operators should treat collection and remit-

tance mechanics as proposed rather than final.

Status and likely timeline

The 10 September announcement confirms a Government policy direction and responds to the earlier

consultation on the proposed levy. It does not itself create a legal obligation to charge or remit a

levy.

The expected next steps are:

1. introduction of a Bill;

2. Parliamentary scrutiny and approval;

3. publication of regulations and detailed guidance;

4. designation or confirmation of eligible strategic authorities;

5. local consultation with residents, businesses and other stakeholders;

6. publication of a local levy proposal and spending plan; and

7. a notice period before any local levy begins.

Mayors and relevant strategic authorities are expected to set out plans for how levy income would be

spent by early 2028. Given the need for national legislation, local consultation, system preparation

and notice to businesses, a levy is unlikely to affect operators before 2028.

That is an expected timing assessment, not a guaranteed commencement date. The final timetable

will depend on the Bill, Parliamentary progress and each authority’s decision.

Why this matters to accommodation providers

For hotels, B&Bs, holiday lets and short-term-rental operators, the levy could create new responsibili-

ties, including:

• registering with a strategic authority;

• identifying chargeable stays;

• calculating a percentage charge;

• displaying the levy clearly to guests;

• updating booking and payment systems;

• separating accommodation charges from other services;

• accounting for packages and discounts;

• submitting returns;

• paying collected amounts by the required deadline; and

• retaining evidence to support the calculation.

Providers should also consider how a levy could affect:

• advertised prices;

• direct-booking conversion;

• booking-platform presentation;

• cancellation and refund terms;

• group and corporate bookings;

• overseas visitors’ understanding of additional charges; and

• competition with destinations that do not impose a levy.

No operator should add a new “visitor levy” to customer invoices merely because the Government

has announced the policy direction. A local legal power and an operative local scheme would need to

exist first.

Why this matters to restaurants, bars and pubs

Restaurants, bars and pubs will not generally be the party collecting the levy unless they also provide

qualifying overnight accommodation.

However, the levy could still affect the wider hospitality economy through:

• changes to the total cost of overnight stays;

• possible changes in visitor numbers and booking patterns;

• destination competitiveness;

• the attractiveness of domestic breaks;

• hotel and holiday-let investment;

• demand for meals, drinks and activities from overnight visitors; and

• the way local authorities fund tourism, transport, events and public-realm improvements.

A levy could produce benefits if revenue is invested effectively in the visitor economy. Better trans-

port, public spaces, events and destination marketing may support local trading conditions. Equally,

an excessive or poorly administered charge could make a destination less competitive and reduce vis-

itor spending.

The impact is therefore likely to vary significantly between regions.

Sector response

The proposal has attracted strong opposition from parts of the hospitality industry.

UKHospitality has estimated that an uncapped visitor levy could cost the sector approximately £1.6

billion and put tens of thousands of jobs at risk. It has argued that the policy could increase the

cost of domestic holidays and weaken the competitiveness of English destinations. UKHospitality has

also promoted an alternative approach based on revenue-sharing and investment in the visitor econ-

omy rather than an additional charge with no national rate limit.

IHG, the owner of brands including Holiday Inn, has publicly opposed the proposal and urged the

Government to reconsider it. Other accommodation and tourism businesses have raised concerns

about:

• the absence of a national maximum rate;

• administrative costs;

• inconsistent local schemes;

• the effect on family holidays;

• the risk of reduced demand; and

• the effect on recruitment and employment.

These are industry positions and forecasts, not settled legal or economic findings. The actual effect

will depend on the final legislation, local rates, exemptions, collection arrangements and how the rev-

enue is spent.

Practical checklist for operators

If you provide overnight accommodation

1. Identify your relevant strategic authority.

Check which Mayoral Strategic Authority, Foundation Strategic Authority or other authority would

cover your premises.

2. Watch for local signals.

Look for announcements, consultations, working groups and tourism-sector engagement in your

area.

3. Do not charge anything yet.

No new levy is currently payable under this announcement alone.

4. Review your booking technology.

Establish whether your PMS, EPOS, booking engine and payment provider could support a sepa-

rate percentage-based charge.

5. Review your booking terms.

Consider how any future levy would be described, varied, refunded and displayed to guests.

6. Plan for transparent pricing.

Avoid presenting a mandatory charge in a way that could mislead customers about the total cost

of the stay.

7. Map complex booking scenarios.

Consider packages, meals included in accommodation prices, discounts, group bookings, refunds,

no-shows and bookings made through platforms.

8. Keep evidence of your treatment.

Once a local scheme is proposed, keep records of calculations, returns, payments, system changes

and customer communications.

9. Participate in consultation.

If your area proposes a levy, respond with evidence about administration costs, likely demand ef-

fects, seasonality and the needs of independent operators.

10. Model the commercial impact.

Test different rate assumptions and assess possible effects on occupancy, average daily rate, direct

bookings and cancellation behaviour.

If you operate a restaurant, bar or pub without accommodation

1. Monitor whether your destination authority intends to introduce a levy.

2. Assess your reliance on hotel, holiday-let and short-term-rental visitors.

3. Track proposed spending plans, particularly for transport, events, public realm and destination

marketing.

4. Engage with local tourism and hospitality consultations.

5. Review whether your 2027 and 2028 budgets should include different visitor-demand scenarios.

6. Coordinate with accommodation partners and local trade bodies where the levy could affect the

whole destination.

Key points to remember

• The levy is a proposed local power, not an immediate national charge.

• It would be discretionary rather than automatic.

• The preferred model is a percentage of the accommodation cost.

• There is currently no national cap specified in the policy announcement.

• Hotels, B&Bs, holiday lets and other commercially let visitor accommodation could be covered.

• Temporary accommodation, shelters and refuges are among the proposed exclusions.

• Local leaders may create further exemptions, subject to the final framework.

• Accommodation providers are expected to collect and remit the levy if their area adopts it.

• A Bill and further regulations are still required.

• Local consultation will be required before implementation.

• The earliest practical impact is unlikely to be before 2028.

• Restaurants, bars and pubs may be affected indirectly through visitor demand and destination

competitiveness.

Sources

• GOV.UK: Visitor levy in England

• GOV.UK: Levy on overnight trips will help mayors invest in local growth

• GOV.UK: Overnight visitor levy in England — policy document

• UKHospitality: Government set to announce unlimited taxation on family holidays

Important note

This briefing provides general information about a developing policy proposal. It is not legal, tax or fi-

nancial advice. The final position may change when legislation, regulations, official guidance and local

schemes are published. Operators should obtain advice from a suitably qualified and licensed profes-

sional before charging, collecting or remitting any levy.