MercoPress. South Atlantic News Agency

London tax for visitors, if Parliament passes community empowerment bill

The UK government is preparing new powers for local leaders under the English Devolution and Community Empowerment Bill, currently progressing in Parliament.

Visitors to London could soon be paying extra, if they stay overnight in hotels or Airbnb style accommodation by paying a tourist tax. The extra cost could raise hundreds of millions of pounds for mayors to spend on local public transport services as soon as the 2027/28 financial year.

In effect the UK government is preparing new powers for local leaders under the English Devolution and Community Empowerment Bill, which is currently progressing through Parliament.

Chancellor Rachel Reeves is expected to outline these plans in her budget this week on Wednesday, allowing mayors, to introduce a levy if they choose. 

London’s mayor Sir Sadiq Khan cautiously welcomes the idea according to the BBC. Sir Sadiq has repeatedly argued that the capital city should have the same options as other global cities that already apply visitor charges, such as Paris, Toronto, New York, and Tokyo.

If the charge goes ahead, London’s City Hall estimates it could collect up to £240 million a year, depending on the final design of the scheme and visitor demand. 

London welcomed 20.95 million international visitors and 13.96 million domestic visitors, totaling more than 34.9 million visitors last year, according to figures from Road Genius. 

For overnight figures, it's reported that the city recorded 154 million visitor nights in 2024 according to Road Genius.

City Hall officials say any additional revenue could help support local services and manage the pressures created by high visitor numbers.

Business groups say they are waiting for more detail on how the levy would be applied and what visitors might be asked to pay.

The tax would apply to hotel stays as well as short-term rentals, including platforms such as Airbnb. City Hall has not yet confirmed the final model, but discussions have included both a fixed nightly fee and a percentage-based charge added to accommodation bills.