Overnight Visitor Levy Bill

Overnight Visitor Levy Bill - what we know from the King’s Speech

The Government has confirmed plans to introduce a new standalone Overnight Visitor Levy Bill, announced as part of the recent King's Speech.

According to the Government’s published background briefing notes, the Bill represents “the first step in a new era of fiscal devolution in England”, giving mayors-  and potentially other local leaders of Foundation Strategic Authorities - powers to introduce a visitor levy to raise and invest funds in projects that improve local areas, raise living standards and support economic growth.

Key points confirmed by Government

The King’s Speech and accompanying briefing notes confirmed several important developments:

• Wider scope of authorities: The proposed powers may extend beyond Mayoral Strategic Authorities to include Foundation Strategic Authorities  - a significant widening compared with the original consultation proposals.
• Further consultation response to follow: The Government has stated it will “shortly publish a response to the consultation, setting out stakeholder views and providing further detail on the design and implementation of the levy.”
• Legislative extent: The Bill will extend to England and Wales but apply in England only.
• International comparison: The Government highlighted that the UK currently collects just 5.8% of national tax revenue at sub-national level -  the lowest proportion among G7 countries. Comparative figures cited include France at 20.4%, Japan at 36.0% and the USA at 45.7%. The Government also noted that all other G7 countries operate some form of tourism or accommodation levy.

Details yet to be confirmed

A number of key operational details remain unclear at this stage, including:

• Whether the levy will be charged as a flat fee or percentage-based rate
• Any cap on consecutive nights charged
• The implementation timetable
• Whether revenues will be ring-fenced specifically for the visitor economy
• How short-term lets will be treated ahead of a national short-term let registration scheme
• Whether the extension to Foundation Strategic Authorities will appear in the Bill at introduction or be introduced later through secondary legislation

NCC Position

The NCC will continue to press for a national framework with a clear cap on rate and on consecutive nights and ring-fencing of revenue to be reinvested in the visitor economy and destination management and not absorbed into general local-authority budgets. We are also urging government for a clear implementation timetable to allow for adequate notice for operators.

Further updates will be shared as the Government publishes its formal consultation response and draft legislation.