Andy Burnham has proposed a new "overnight visitor levy" that would allow England's 14 regional mayors to tax accommodation costs. If implemented by 2028, the policy could shift from flat fees to a percentage-based tax with no maximum limit.
The evolution from Manchester's £1 VAT charge
The proposed policy builds on a history of localized visitor charges across the United Kingdom. As the source reports, this move follows a pattern established in 2023 when Andy Burnham introduced a £1-plus-VAT per room charge in Greater Manchester. Similar models have been implemented in Liverpool and Edinburgh, though those instances involved varying rates and specific time limits.
This new mandate represents a significant escalation in fiscal authority for regional leaders. Instead of a fixed fee, the 2028 proposal would allow mayors to implement a tax of up to 5 percent on nightly accommodation rates. Crucially, the source notes that this new levy would be uncapped, meaning there is no upper limit on how much a local leader could potentially charge visitors.
Oxford Economics' £1.8 billion tourism spending warning
Economic projections regarding this shift suggest a potentially devastating impact on the national economy... According to Oxford Economics , the widespread adoption of such a levy could lead to a cumulative £1.8 billion decline in tourism spending by the year 2030.
The data also points to a significant contraction in the hospitality workforce and investment levels. The report notes that the policy could eliminate over 33,000 jobs and lead to a reduction of 11.9 million hotel nights spent within the country. Furthermore, the implementation could reduce Treasury tax receipts by almost £700 million and cut direct investment from tourism businesses by £101 million.
Why UK Hospitality fears 'unlimited' levies on thin margins
Industry leaders have reacted with significant alarm to the potential for uncapped taxation on already expensive holidays. As reported, Tina McKenzie, the national chairman of the Federation of Small Businesses, described the proposed levy as a "kick in the teeth" for a sector already struggling with rising operational costs.
The concern is not just about the tax itself,but the lack of a ceiling on its application. Allen Simpson, the chief executive of UK Hospitality, warned that granting mayors the power to set these rates could lead to unlimited levies that threaten the thin profit margins of many hospitality providers. This could make UK holidays even more difficult for families to afford.
Who will protect tourists in Cornwall and the Cotswolds?
The political landscape remains deeply fractured over the 2028 mandate. While Prime Minister's spokespersons have defended the move as a way to trust local leaders, Shadow Chancellor Andrew Griffith has criticized the policy as a "cash-crash" for hardworking families. Local officials like Angela Rayner have defended the initiative as a way to reinvest tourism revenue back into communities.
However, several critical uncertainties remain regarding the actual implementation of the policy. It is still unclear how regional authorities will prevent a mass exodus of tourists from popular destinations like Cornwall and the Cotswolds. Additionally, the source does not clarify what specific measures, if any, will be taken to ensure that the tax does not disproportionately burden low-income families.
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