King's Speech 2026: Overnight Visitor Levy Bill

Overnight Visitor Levy Bill

● The Overnight Visitor Levy Bill will deliver on the manifesto commitment to
transfer power out of Westminster by devolving new revenue raising powers.

● This is the first step in a new era of fiscal devolution in England, giving mayors
and potentially other local leaders of Foundation Strategic Authorities the
power to introduce a levy to raise and invest money into projects that improve
their areas, raise living standards and drive growth.

What does the Bill do?

● In the 2025 Budget, the Government committed to a new overnight
visitor levy and launched a consultation on its design. This Bill delivers
on that commitment. The Government will shortly publish a response to the
consultation, setting out stakeholder views and providing further detail on the
design and implementation of the levy, including a position on extending this
power to Foundation Strategic Authorities.

● The levy will enable places to reinvest revenue in local priorities,
support economic growth, strengthen public services, and improve the
visitor experience – helping destinations remain attractive to visitors while
ensuring tourism contributes to thriving local communities. The Overnight
Visitor Levy will enable mayors and potentially other local leaders to raise
revenue and reinvest it back into their local economies.

● This Bill will bring England in line with Scotland and Wales, as well as
international peers. Scotland and Wales have already introduced powers for
local authorities to raise a visitor levy. Visitor levies are common in Europe
and the rest of the world, and all other G7 countries already maintain some
form of tourism or accommodation levy.

● This Bill will provide a legislative framework to enable mayors and
potentially other local leaders to introduce a levy. It is anticipated that the
Bill will address the broad conditions under which a levy may be introduced,
as well as the structure of the tax.

Territorial extent and application

● This Bill will extend to England and Wales and apply to England only.

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Key facts

● Mayors and local leaders in the UK are left far behind their international
equivalents in their ability to raise revenue locally. According to the
Organisation for Economic Co-operation and Development (OECD), the share
of national taxes collected at the sub-national level in the UK is 5.8 per cent:
just a fifth of the European Union average, and the lowest of the G7 by far. In
France, the share is 20.4 per cent; in Japan, 36.0 per cent, and in the USA,
45.7 per cent.

● Extending the power to introduce an Overnight Visitor Levy will bring
England in line with leaders in similar destinations. All other G7 countries
already have some form of tourism or overnight accommodation levy in place.
Some of these are well established – France has had an equivalent levy in
place since 1910. Others are more recent: Norway, for example, is introducing
their visitor contribution from summer 2026. Cities such as New York,
Amsterdam, and Rome apply overnight charges to fund local services.

● Similar powers are used worldwide to support communities and the
visitor economy. Visitor levies have supported projects from large scale
infrastructure works, such as expanding the capacity of public transport
networks, to attracting and supporting major cultural and sporting events, to
smaller public realm improvements like street cleaning around tourist sites.
The exact amount raised by local areas to support such projects in England
will be dependent on decisions by mayors with their constituent authorities.

● Mayor of West Yorkshire, Tracy Brabin, said "Mayors have made a strong
case for the introduction of this levy as the first step toward fiscal devolution,
and we're delighted the government has listened. By asking visitors to pay a
small fee on overnight stays, we'll be able to invest more into making our
regions even better places to visit - driving tourism and growth, unlocking
opportunities, and helping our businesses thrive. This is a further vote of
confidence in devolution and shows the government is backing mayors to
deliver our ambitions.”

● Mayor of London, Sadiq Khan, said “Giving mayors the powers to raise a
tourist levy is great news for London. The extra funding will directly support
London’s economy, and help cement our reputation as a global tourism and
business destination.”

● Mayor of the Liverpool City Region, Steve Rotheram, said “Our visitor
economy is worth more than £6 billion a year and supports over 55,000 local
jobs. A modest levy is money that would stay local and be reinvested in the
things that make our region stand out.”

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