Parliamentary group launches tourist tax inquiry

The All Party Parliamentary Group (APPG) for Hospitality and Tourism has launched an inquiry into the government’s proposed visitor levy.

The King’s Speech confirmed the inclusion of a holiday tax bill last week and, according to the speech’s background briefing notes, the bill would “provide a legislative framework to enable mayors and potentially other local leaders to introduce a levy”.

The notes also stated that the Overnight Visitor Levy Bill, originally proposed in the 2025 Budget, would “bring England in line with Scotland and Wales, as well as international peers” that operate under a similar policy, citing France, Norway, New York, Amsterdam and Rome as equivalents.

A consultation into the proposed measures is currently awaiting a government response.

The APPG for Hospitality and Tourism is holding oral evidence sessions on 20 May, 9 June and 23 June, where MPs and peers will hear from affected businesses. It will cover the principle of a levy itself, the potential impacts on the visitor economy and the levy’s design and implementation. The APPG is also seeking written evidence from interested businesses.

Chris Webb, MP for Blackpool South and chair of the APPG, said: “Hospitality and tourism are vital to our local economies and communities across the UK. They support jobs, investment and growth, so it is important that any proposals for a visitor levy are fully considered.

“This inquiry will ensure Parliament hears directly from affected businesses and aims to understand the potential impacts on businesses, destinations and customers.”

Following evidence sessions, the APPG will prepare and publish its findings from the inquiry, with recommendations for the government.

UKHospitality has already described the proposed levy as “nonsensical”, with chief executive Allen Simpson saying: “A holiday tax will increase the cost of a staycation for Brits, it will hit lower-income families hardest, it will lose the Treasury money and it will cost 33,000 jobs.

“This tax, on top of the UK’s 20% rate of VAT, will make us an outlier in Europe. The tax on a holiday in the UK will become double many of our major rivals, who enjoy a much lower rate of VAT.”

In December 2025, hoteliers raised concerns over the introduction of a so-called tourist tax on overnight stays in England, with budget accommodation operators warning they could be disproportionately impacted.

Larry Lipman, chairman at European hostel operator Safestay Hostels & Hotels, told The Caterer at the time: “We don’t know how it’s going to be levied, but what we’re all scared of is if they say £2 per bed, it’s going to kill us.”