The government has confirmed that England’s mayors and local leaders will be able to charge a levy on overnight stays, but no council can charge one yet. Legislation has not been introduced, there is no national rate or cap, and the government expects local spending plans only by March 2028.
The decision follows a consultation that ran from 26 November 2025 to 18 February 2026 and drew 1,223 unique responses. On several of the biggest questions, the government chose the opposite of the majority view.
What has been decided?
- Who can charge: All mayoral and foundation strategic authorities will have the power. A levy must cover the authority’s whole area, not just part of it.
- How it is calculated: A percentage of the accommodation cost. Meals and other extras are excluded.
- Rate: Each authority sets one rate for its area. It cannot vary it by season, accommodation type or constituent council. The government “does not intend to set a cap”, though it says it will keep considering this.
- What is covered: All short-term, commercially let visitor accommodation, unless exempt.
- Who pays and collects: Accommodation providers are liable and must self-assess. The strategic authority acts as the tax authority and collects the levy. Providers may pass the cost on to guests.
Who would not pay?
Nationally exempt are non-commercial stays (such as with family or friends), dedicated temporary accommodation, registered gypsy and traveller sites, and charitable shelter or refuge accommodation. Exemptions are based on the type of accommodation, not on who the visitor is.
Authorities can choose to exempt tent pitches, touring caravan pitches and hostels after local consultation. A minimum threshold will exclude occasional, informal providers, but the response sets no figure for it. Government response (PDF)
Where does the process stand?
Plans were confirmed in late September 2026 (23 September, according to a tax-news summary; the government response itself shows no publication date). The government intends to legislate in the current parliamentary session, but the response says draft legislation is not yet available and voting arrangements will be decided before a Bill is introduced. Ross Martin summary, ICAEW
Before introducing a levy, local leaders must consult locally, publish a prospectus, and then publish a final prospectus and impact assessment. The government dropped its proposed 12-month minimum notice period, so authorities will set notice periods themselves. It also expects local leaders to set out plans for how revenue will be invested by March 2028, subject to parliamentary approval.
Where the government went against the consultation
| Question | What respondents said | What the government decided |
|---|---|---|
| Percentage-based levy | 60% (726) opposed | Kept the percentage model |
| Cap on the rate | 58% (706) supported | No cap planned |
| Extend powers to foundation authorities | 53% (651) opposed | Extended |
| Formal local consultation | 68% (834) supported | Adopted |
These are consultation results, not a representative poll. Government response (PDF)
Where would the money go?
Local authorities decide how the revenue is invested, in line with regional growth strategies. Spending can support the visitor economy but is not limited to it, so the response does not adopt a formal tourism ring-fence. Authorities must report revenue and spending annually, but the format of spending plans is still being considered. The response does not clearly confirm whether some revenue can cover administration costs.
For visitors and hoteliers, the open question is whether levy money will visibly return to the places that raise it.
What is still unsettled?
- The tax point: The moment liability arises is not settled. The government may explore booking platforms collecting the levy on providers’ behalf.
- Registration: Whether registering is mandatory is still under consideration.
- Enforcement: Authorities will get information and inspection powers and can charge interest and penalties. An appeals framework will be set out later.
- Rates: No rates exist yet, so any figure quoted for an English levy today is speculation.
What it means for your trip
Nothing changes for stays in England today. Once the law passes, expect a percentage added to the accommodation bill in places whose mayor or local leader adopts a levy, with a different rate in each area. Check whether your booking shows the levy separately, and who collects it.
The government says it drew on Scotland’s experience with percentage levies and worked with the Welsh and Scottish governments, but the response gives no detail on their rates or results.