The Holiday Tax: Another Tax on Working People

The Government is preparing to give Regional Mayors and other strategic authorities across England the power to impose a new tax on overnight accommodation.

It is officially called an Overnight Visitor Levy. Ministers may prefer the word "levy", but let's be clear about what it means for workers and their families.

It is another tax.

And it isn't just foreign tourists who could pay it. A family living in England, taking a holiday in England could be taxed simply for staying overnight in another part of their own country.

What is the new tax?

Under the Government's plans, Regional Mayors and other strategic authorities will be able to introduce a percentage charge on overnight accommodation.

That could include hotels, bed and breakfasts, holiday lets and other accommodation covered by the eventual legislation.
The Government says authorities will decide locally whether to introduce the tax and how the money raised should be invested.

Labour's ten Regional Mayors have pledged that any levy they introduce will be capped at 5%
But that is a political pledge, not a national statutory cap.

Today's Mayor can promise 5%. What guarantees what a future Mayor will do?

Once a new tax and the machinery for collecting it have been established, working people are entitled to ask where it will end.

What could 5% actually cost you?

The percentage can make the tax sound insignificant. Put it into pounds and the picture becomes clearer.
Take a family booking a seven-night holiday in England costing £2,000 for their accommodation.

A 5% holiday tax would add:

£2,000 x 5% = £100

Their £2,000 accommodation bill becomes £2,100.
Spend £3,000 on accommodation and 5% is another £150.

That is money which could otherwise be spent in local restaurants, pubs, shops and attractions.
And remember, this isn't necessarily a foreign tourist paying it.

It could be you.

Which mayors support it?

A number of Regional Mayors oppose what the Government is proposing. Please see who appears against and for this tax.

The Labour Mayors covering London, Greater Manchester, Liverpool City Region, West Midlands, North East, West of England, West Yorkshire, South Yorkshire, East Midlands, and York and North Yorkshire support being given the power and have pledged a 5% ceiling where a levy is introduced. However they support introducing it

But not every Mayor wants this new taxing power.

Conservative mayors Ben Houchen in Tees Valley and Paul Bristow in Cambridgeshire and Peterborough oppose the policy.
Reform UK mayors Andrea Jenkyns in Greater Lincolnshire and Luke Campbell in Hull and East Yorkshire are also opposed.

Although the opposition currently appears to fall largely along party-political lines, this is actually where the political independence of the Workers of England Union is important. We are not affiliated to a political party, so we don't need to take sides politically. We are simply highlighting who is for the tax, who is against it and what that means for workers.

The WEU's position is straightforward: We don't want if England Kept all it's Taxes facing another tax.

However it must be acknowledged that this could result into an extraordinary situation where the tax you pay depends upon which regional political boundary your hotel happens to fall within.

England is becoming a tax postcode lottery

This goes beyond the cost of a weekend away.

It demonstrates the danger of continuing to fragment England by transferring significant powers to Regional political structures.

One mayor introduces a tax. Another doesn't. One promises a 5% ceiling. A future mayor could take a different position.
Instead of one clear system for England, workers and businesses face increasingly different rules depending upon where they live, work or visit.

If Parliament believes a new tax on overnight accommodation is necessary, it should have the courage to debate and take responsibility for that tax nationally.

Handing the power down to Regional Mayors does not make it any less of a tax.

Hospitality workers could pay the price

UKHospitality has warned of serious economic consequences.

Its modelling suggests a 5% levy could put 33,000 jobs at risk, reduce tourism spending by £1.78 billion and reduce GDP by £2.2 billion.

That matters to Trade Union members.

Hotels, pubs, restaurants, holiday parks, cafés and visitor attractions employ ordinary working people. If families respond to higher prices by taking fewer breaks, shortening their stays or spending less while they are away, workers could ultimately feel the consequences of "another tax on working people"

This tax will also affect people travelling and staying overnight for business or work as well. Although this article is highlighting the impact on families going on holiday it is not just a tourist levy. It is essentially a new tax on overnight accommodation, regardless of why someone is staying there.

The WEU next article will be looking specifically at the impact on businesses. The WEU will approach some business and hospitality groups for their views on the additional costs, the impact on business travel and who ultimately ends up paying.

Stephen Morris, General Secretary of the Workers of England Union, said:

“Let's stop dressing this up as a tourism levy. If a family in England can be taxed for taking a holiday in England, it is another tax on working people.

“A 5% pledge might sound reassuring today, but a political promise is not a legal safeguard. Once politicians have been handed a new power to tax, there is no guarantee that today's rate will remain tomorrow's rate.

“We are also deeply concerned about the continuing fragmentation of England. Working people should not face different taxes simply because they cross from one mayoral authority into another.”

A holiday in your own country should not become another opportunity to tax you

Working families already pay tax on their earnings and then pay VAT and other taxes when they spend what remains.
They should not then face another locally imposed charge simply because they decide to spend a few nights away in their own country.

Call it an Overnight Visitor Levy. Call it a tourism levy.

For the family paying the bill, it amounts to the same thing. The Workers of England Union calls it out for what it means for workers and their families across England:

“Taxed for Taking a Break: The New Holiday Tax Coming to England”.

Next article: The impact of the new overnight tax on businesses. What will it mean for employers, workers and business travellers? (coming soon)

References: (UK Government, Ministry of Housing, Communities and Local Government; UK Parliament; UKHospitality/Oxford Economics; BBC News; The i Paper, 10 September 2026; The Caterer, September 2026 and numerous different media outlets)

Key Takeaways

• New Overnight Visitor Levy: Regional Mayors are gaining powers to charge an overnight accommodation tax, adding up to 5% (or more) to domestic staycations.
• Direct Cost Impact on Families: A 5% levy adds £100 to a £2,000 family staycation, hitting working households taking domestic holidays in England.
• Regional Postcode Lottery: Fragmented mayoral tax decisions create inconsistent regional rules across England for both holidaymakers and business travellers.
• Hospitality Job Risks: UKHospitality modeling warns a 5% levy could threaten 33,000 jobs, reduce GDP by £2.2bn, and cut tourism spending by £1.78bn.