The government has confirmed plans for an Overnight Visitor Levy for England, giving mayors and other local leaders the power to introduce a charge on overnight stays.
The government has set out the design of the new Overnight Visitor Levy in its consultation outcome document and confirmed plans to introduce the levy during this Parliament.
- This follows a consultation that ran between November 2025 and February 2026 and received over 1,200 responses.
Mayors and leaders of Foundation Strategic Authorities (FSAs) will decide whether to introduce a levy in their area, but only following local consultation and advance notice to businesses.
The levy will operate within a standardised framework, established through legislation and guidance, confirming the rate type, application and any exemptions.
This article sets out how the government expect the levy to operate, although draft legislation is not yet available.
Who can introduce the levy?
- It is expected that all mayors and FSAs in England will have the power to introduce the levy in their area provided they:
- Consult locally before implementation.
- Give businesses advance notice before introduction and any subsequent changes.
Levy rate
- The levy will be a percentage of the accommodation cost, rather than a flat fee.
- Strategic authorities are expected to set their own rates but are unlikely to be allowed to vary by season, accommodation type, or constituent authority.
- The government does not currently intend to introduce a national cap on levy rates.
Liability and collection
- Accommodation providers will be liable for the levy but may choose to pass the cost on to visitors.
- Providers will also be responsible for calculating and declaring their levy liabilities through a self-assessment process.
- The strategic authorities will be responsible for the administration and collection of the levy and decide how revenues are spent.
Exemptions
- The levy will apply to all short-term visitor accommodation, subject to national and discretionary local exemptions.
- It is expected that non-commercial accommodation, temporary accommodation, charity accommodation for shelter or refuge, and registered gypsy and traveller sites will be exempt nationally.
- Local leaders will have the flexibility to offer further local exemptions, such as for campsites.
- Exemptions are expected to be based on accommodation type, rather than visitor characteristics.
- A de minimis threshold will likely be introduced to exempt occasional informal providers.
Next steps
- The government has said that it will continue to engage with businesses and accommodation providers to finalise the technical design.
- Legislation is likely to be laid during the current Parliamentary session and, subject to approval, the government expects local leaders to be able to set out how revenues will be invested by March 2028.
The government's response provides a broad framework for the levy. Accommodation providers and advisors in affected areas may wish to monitor further developments as draft legislation emerges.
A visitor levy is already in place for Scotland and Wales.
Useful guides on this topic
Airbnb: Tax Overview
What expenses can Airbnb owners claim for tax purposes? How is income taxed? Can you claim Rent-a-Room Relief? How does it affect Private Residence Relief? What are the VAT rules?
Campsites & Caravans: Tax Overview
What expenses can campsite owners claim for tax purposes? How is income taxed? Are there special tax and accounting rules when land is used for camping on a seasonal basis? What are the rules for caravans and campervans? What are the VAT rules?
External links
HMRC: Local leaders handed powers to drive investment in communities
HMRC: Visitor Levy in England - government response