London Mayor set to get new powers to impose tourism tax

CHANCELLOR EXPECTED TO ALLOW NEW LEVY COMMON ACROSS THE WORLD

- By KUMAIL JAFFER Local democracy reporter

Mayor of London Sadiq Khan in New York, where the city imposes a percentage levy on accommodation bills for tourists

(STEFAN ROUSSEAU/PA)

THE Mayor of London has cautiously welcomed reports that he will be granted the power to impose a tourist levy on visitors staying overnight in the capital, and a report outlines how such a tax could work in London.

Chancellor Rachel Reeves is expected to give Sir Sadiq Khan and other civic chiefs the authority to do so through the English Devolution and Community Empowerment Bill, which is currently going through Parliament. Sir Sadiq has been vocal in calling for such powers to be devolved, with estimates suggesting a 'tourist tax' in London could raise up to £240million a year. In 2024, London saw 89m overnight stays.

Currently, England is the only country among the G7 where national government prevents local authorities or Mayors from implementing tourist levies.

Scotland and Wales have both recently introduced different types of taxes on overnight visitors, with local authorities in the former able to set their own levy as a percentage rate of the daily bill for accommodation. From 2026, Welsh authorities will be able to collect £1.30 per night from visitors.

Last week the Mayor's office appeared to welcome the proposed changes, but said they would not comment on “speculation” and would wait before making any concrete preparations.