London Edges Closer to Introducing Tourist Tax

London is poised to gain the power to introduce a tourist levy on overnight stays.

London’s government has long backed a levy, arguing it could raise as much as £240m a year, supported by 89 million overnight stays in 2024. A recent analysis by the Centre for Cities, a think tank, suggested London would be best suited to either a flat nightly fee or a percentage charge, mirroring systems in New York, Toronto, and Paris. The think tank said a well targeted levy could boost infrastructure and strengthen the capital’s business environment.

Hospitality groups reject the plan. UK Hospitality warned it would burden families and risk deterring visitors in a sector already subject to a 20% VAT rate. Several London boroughs, including Westminster, Southwark, and Brent, strongly support the change, saying it would ease pressure on local taxpayers and fund essential services. The government has yet to formally confirm the policy, but an announcement is expected in the coming months.