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Government Poised to Give Mayors Tourist-Tax Powers Ahead of Budget

Chancellor Rachel Reeves is expected to propose giving mayors the power to levy overnight charges in the November 26 Budget.

Overview

  • Reports indicate the measure would be enabled through the English Devolution and Community Empowerment Bill, with final details due at the Budget.
  • Sadiq Khan has cautiously welcomed the idea and says London will examine evidence from other cities before choosing a model or rate.
  • A Centre for Cities briefing suggests London would suit a percentage-based or flat-fee levy, noting the UK lacks a national hotel star-rating system.
  • City Hall estimates indicate a London levy could raise up to £240 million a year, with 89 million overnight stays recorded in 2024.
  • Edinburgh plans a 5% room charge next year, and cities such as Paris, New York and Venice already levy visitors, offering benchmarks for London.