Daily · Post Line
54 minutes ago James W Kelly London Getty Images Plans for a tourist levy in London may be capped although no confirmation has been made yet London's tourism levy will be capped at 5% of the cost of accommodation, the BBC understands. Sir Sadiq Khan said he "strongly" welcomed plans set to be formally unveiled by the government later granting mayors in England the power to set an uncapped overnight visitors' levy - often referred to as a tourism tax. A source at City Hall told BBC London that officials had not landed on an exact figure for the capital but that it would be no higher than 5%.
An industry body said the levy could put tourists off visiting London, while Conservative-led Westminster Council called for boroughs to keep half the funds raised in their area. The government will provide more details on the policy, first announced last November, after the Housing Secretary Angela Rayner meets mayors virtually at No 10 North on Thursday afternoon. Under the proposals, local leaders would decide how the revenue raised should be reinvested.
Getty Images The tourist tax policy was first announced by former PM Keir Starmer last year The mayor of London said: "I strongly welcome the government giving London the power to introduce an Overnight Visitor Levy. This needs to happen sooner rather than later. "London's visitor economy is a huge success story, supporting jobs, businesses and investment across the capital and the wider country, and I have long argued that London should have the same flexibility as other major global cities to raise and invest funding locally." Sir Sadiq added that a "well-designed, modest levy" could fund the growth of "London's offer to visitors".
The levy could be in place by March 2028, according to a government document published in July, when Prime Minister Andy Burnham reiterated his commitment to the policy as part of his wider devolution agenda. Charges of a similar nature already exist across Europe, with the revenue used to fund local services. Groups representing the tourism trade have warned about the impact of the tax and called for consistency in how it operates across different regions.
Allen Simpson says hospitality jobs are "at risk" with the levy Allen Simpson, chief executive of the trade body, said a tourism tax introduced in Edinburgh in July was "already having damaging effects" and said jobs could be at risk in communities that rely on tourism and hospitality. Paul Swaddle, Westminster Council's leader, said VAT rates for hotels in other European cities were "significantly lower and the total tax burden is lower", so the tourist levy could make Westminster hotels less competitive. In France, which has the same 20% standard VAT rate as the UK, hotel stays are taxed at a 10% reduced rate with many cities applying their own local tourist levy.
Several other European countries apply a similar reduced VAT rate to hotel stays. "If the levy is to be raised, local authorities need to keep at least half to be spent locally for services that benefit visitors, such as keeping the streets clean and safe," Swaddle said. He said the cost of supporting the "visitor and commuter economy in Westminster" is estimated at £115m.
London Councils, which represents the capital's 33 local authorities, has also called for "boroughs to retain a fair share of revenues". City Hall and the government have not laid out how the levy would be collected, distributed or spent.
Source: BBC
