English Mayors Pledge 5% Cap on Proposed New Overnight Visitor Levies

On September 10, 2026, a coalition of Labour mayors representing 10 major English city regions—including London, Manchester, and Liverpool—announced a voluntary commitment to cap any future 'tourist tax' at 5%. This development follows the government's announcement on September 10, 2026, regarding new powers for English strategic authorities to introduce visitor levies. Currently, local authorities in England lack the legal power to implement such taxes, though some have previously utilized creative workarounds via Business Improvement Districts.

The proposed 'Overnight Visitor Levy Bill,' expected in the 2026–27 parliamentary session, aims to provide councils with a mechanism to raise funds for local economic and tourism improvements. By proactively setting a 5% cap, the mayors aim to prevent excessive costs that could drive tourists away while ensuring that the levies remain consistent across different regions. This move is a direct response to concerns from the hospitality sector regarding the cumulative impact of such taxes on visitor numbers and the competitiveness of English cities.

Travellers staying in paid overnight accommodation, such as hotels, bed and breakfasts, and other commercial lodging providers within the participating city regions, will be affected if and when these local authorities implement the levy.

Makutet analysis suggests that while the 5% cap provides a degree of predictability, the fragmented nature of local implementation could create a 'patchwork' of costs across the UK. We anticipate that cities with higher-end hotel markets will be the first to adopt these levies to maximize revenue, while smaller regions may hold back to maintain a competitive edge in attracting domestic and international tourists.