Over 200 leaders from the UK’s hospitality and leisure sector have urged the Government to reconsider the proposed visitor levies.
Major accommodation providers such as Butlins, Haven, Hilton and Travelodge signed a joint letter to the Chancellor stating that “holidays are for relaxing, not taxing”.
They warned that a tourist tax could weaken the UK’s competitiveness as a holiday destination and affect millions of jobs.
With the school half-term upon us, many businesses are assessing how a tourist tax could affect them financially and if they could survive it.
At the Autumn Budget 2025, the Government announced that it would give mayoral authorities in England the power to introduce a visitor levy on overnight stays.
The charge would apply to hotels, B&Bs, guesthouses, short-term rentals, campsites and other paid accommodation.
Often referred to as ‘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 tourist tax, explaining that the funds raised could support local infrastructure, public services and tourist development.
The consultation in England is ongoing, but some cities already have local schemes in place.
Manchester introduced a £2 per night charge in 2023 and Liverpool soon followed in June 2025, which is expected to generate £4.5 million annually.
In Scotland, the Visitor Levy (Amendment) was introduced to the Scottish Parliament in January 2026 and this could indicate how successful or damaging a tourist tax could be for businesses.
The Scottish Government has also consulted on a levy for cruise passengers docking at local ports.
In their letter, industry leaders warned the Chancellor that a visitor levy could add £100 or more to a two-week UK family holiday.
They argue that higher costs could force families to shorten trips, reduce spending in local establishments or encourage travel overseas instead.
Fewer visitors and reduced demand could affect the need for jobs across a range of sectors, 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 added that a visitor levy risks contradicting the Government’s aim of growing the economy and backing British businesses.
If a visitor levy were introduced in your area, this could affect your:
Even though a tourist tax is not confirmed, now could be the right time to forecast the effect on your finances.
Our professional team is here to support your business and we can:
If your business benefits from tourism, you must understand the potential impact of the tax so you can better prepare if it comes into effect.
For further advice or support, contact our team today.
