London Mayor Sadiq Khan has confirmed that a proposed tourism levy in the UK capital will be capped at 5% of the cost of accommodation.
According to the BBC, the UK government has announced plans to give mayors in England powers to introduce an overnight visitor levy on hotels, B&Bs and other accommodation.
While the government has not proposed a national cap on the percentage that local authorities can charge, Khan told BBC London that London's levy would not exceed 5%. The final rate has yet to be determined.
Under the proposed system, accommodation providers would be responsible for paying the levy to the relevant strategic authority or mayor. The charge would be calculated as a percentage of accommodation costs rather than as a flat fee, with lower-cost stays attracting a lower levy.
A formal bill is expected to be introduced in Parliament to establish the legal framework for the new powers.
Khan said revenue raised through the levy would be used to help ensure London remained an attractive destination for visitors.
Tourism and hospitality industry bodies have raised concerns that an additional charge could affect London's competitiveness and increase the cost of travel. UKHospitality CEO, Allen Simpson, warned that visitor levies could place additional pressure on tourism and hospitality businesses.
The London levy could be introduced by March 2028.
