New tourist tax could add hundreds of dollars to UK holiday for Aussie travellers
Travellers could be slugged an additional “tourist tax” in the UK under a plan to give local mayors the power to charge visitors an overnight levy.
Aimed at raising more money for local leaders, the proposed fee would apply to all travellers regardless of nationality or the purpose of their visit, and be payable on hotel rooms, bed-and-breakfasts and holiday lettings.
A London holiday could be set to become even more expensive. iStock
After the Labour government announced the proposal, London Mayor Sadiq Khan said the levy should be introduced “sooner rather than later”.
“A well-designed, modest levy has the potential to provide an important additional source of funding to support growth, strengthen London’s offer to visitors and help us remain globally competitive,” Khan said.
“It would allow us to reinvest in the places, infrastructure, culture and experiences that make London one of the world’s greatest cities to visit, while helping manage the pressures that come with welcoming tens of millions of visitors every year.”
Although there is no official cap on the planned levy, Mr Khan told the BBC that London would leave it at 5 per cent.
The UK government said to protect budget holidays, the levy would be charged as a percentage of the cost of accommodation instead of a flat fee.
However, there are concerns from industry bodies the new levy would turn some travellers away.
A formal bill is due to be introduced in parliament to establish the legal framework for the levy, and it could be in place by March 2028, the BBC reported.
Industry experts are concerned the levy would deter visitors. iStock
How much would the new tourist tax cost?
A week-long stay at an average three-star hotel in London during the summer can cost anywhere between $1200 to $2000.
Add a 5 per cent tourist levy to that, and you could be paying between $60-$100 more on your booking.
If you spend a week in a slightly nicer four-star hotel, at an average of $500 per night, industry experts expect visitors to be slugged an extra £99 ($180) per booking.
Meanwhile, booking a basic room on Saturday night at London’s luxurious Savoy Hotel, which overlooks the Thames, a 5 per cent levy would add £60 ($110) to their £1190 ($2246) bill, The Australian Financial Review reported.
Travellers would need to pay extra on all types of accommodation. Getty Images/iStockphoto
Tourist taxes already in place in the UK
This is not the first tourist tax introduced in the UK, either.
Edinburgh brought in a 5 per cent fee applied to the cost of all paid overnight accommodation in July.
The levy is capped at five nights in a row and charged at the same rate every day of the year.
In 2023, Manchester became the first English city to introduce a tax. It is set at £1 ($1.90) per room, per night and applied to all hotels and short-stay serviced apartments in the city centre with an annual rent value of £75,000 ($141,000) or more.
In Wales, meanwhile, local governments will be able to charge up to £1.30 (€1.50) per person per night starting April 2027.
