UK Prime Minister Grants Mayors Power to Tax Tourists

The Prime Minister of the United Kingdom announced plans to grant regional mayors and strategic authorities in England the power to introduce an overnight visitor levy. Detailed in a Cabinet Office document titled 'Rewiring the State,' the fiscal devolution strategy allows mayors to retain a share of business rates starting in April 2027.

To implement this framework, the government will establish new strategic authorities and elect mayors in Cheshire, Cumbria, and Warrington by May 2027, with additional elections scheduled for spring 2028.

Trade bodies have expressed strong opposition to the move. The Tourism Alliance and UK Hospitality warned that the levy could increase the cost of family holidays by over £100 and potentially lead to 33,000 job losses. UK Hospitality proposed a 'Holiday Bonus' scheme as an alternative, which would reward local authorities with fixed revenue per visitor night rather than taxing tourists directly. Other industry leaders cautioned that a lack of a national framework could lead to a fragmented system of varying rates and exemptions across different regional boundaries.