London’s tourism levy to be capped at 5%, Khan says as mayoral powers expand
?s new overnight tourism levy will be capped at 5% of accommodation costs, Mayor Sadiq Khan said on Thursday, as the government moved to give
London’s new overnight tourism levy will be capped at 5% of accommodation costs, Mayor Sadiq Khan said on Thursday, as the government moved to give English mayors the power to charge visitors staying in hotels and other lodgings.
Khan said he “strongly” welcomed the plan, which Housing Secretary Angela Rayner outlined after a virtual meeting with England’s regional mayors. The government has not imposed a national ceiling on the levy, but the London mayor told BBC London the capital’s rate would not go above 5%, though the exact figure has yet to be set.
What the new powers allow
Under the policy, local leaders will be able to introduce an overnight visitors’ levy as a percentage of the cost of accommodation rather than as a flat fee. That would apply to hotels, bed and breakfasts and other types of overnight stays in places that choose to use the power.
The government said the structure would protect cheaper breaks by ensuring low-cost accommodation pays the lowest levy. A spokesperson said that approach was intended to shield budget holidays while still giving local leaders a new revenue tool.
Pushback from business and councils
Industry groups warned that any extra charge could deter tourists from visiting London. Conservative-run Westminster Council, meanwhile, called for boroughs to keep half of the money raised in their own areas.
The debate lands in a city that depends heavily on visitors. London is the biggest draw in England, and any levy on overnight stays will be watched closely by hotels, travellers and local authorities beyond the capital too.
The move also carries wider significance across England. Other mayors will gain the same power, and they will be able to decide whether to use it, and how high to set it, within the government’s framework.
What happens next
The precise timing for introducing the levy was not set out in the material provided, and the final London rate is still to be confirmed. For now, Khan’s 5% ceiling gives the clearest signal yet of how the capital may use the new powers when local leaders begin setting their own terms.
