News / APPG / Tax

New inquiry warns visitor levy must protect jobs, growth and tourism

July 30, 2026

APPG report calls for safeguards as Government considers visitor levy powers for mayoral authorities.

The All-Party Parliamentary Group (APPG) for Hospitality and Tourism has today published the findings of its inquiry into the Government’s proposed visitor levy on overnight accommodation in England.

The inquiry brought together evidence from hospitality and tourism businesses, local authorities, trade bodies and industry experts to examine the potential impact of a levy on the visitor economy, businesses and local communities.

Recommendations

Following evidence sessions and written submissions from stakeholders including UKHospitality, the Confederation of British Industry, BusinessLDN, UKinbound, the Local Government Association, The Tourism Alliance and major tourism businesses such as Merlin Entertainments, Parkdean Resorts and Forge Holiday Group, the APPG has concluded that significant safeguards would be required before any levy is introduced.

The report highlights concerns around competitiveness, investment, employment and the cumulative tax burden facing hospitality businesses.

Among its recommendations, the APPG has called for:

1
A full Regulatory Impact Assessment and pre-legislative scrutiny before any introduction of a levy.
2
A comprehensive assessment of the cumulative tax burden on hospitality businesses.
3
VAT reform, including a reduction in hospitality VAT to 10%, before any levy is introduced.
4
A consistent national framework to avoid a patchwork of local schemes.
5
Strict and transparent ringfencing of levy revenues for tourism and destination investment.
6
A minimum 12-month implementation period for businesses.
7
Meaningful industry engagement before any local levy is introduced.

The report also highlights evidence presented to the inquiry suggesting that a 5% visitor levy could reduce tourism spending, investment and employment, while increasing costs for holidaymakers.

Evidence heard by the APPG raised particular concerns about impacts on coastal and rural destinations, where hospitality and tourism play a critical role in supporting jobs and local economies.

Chris Webb, MP for Blackpool South and Chair of the APPG, said: “Hospitality, tourism, and leisure are industries that create places people want to live, work, and invest in. They have the potential to transform every single constituency in this country, including my own.

“This report makes clear the concerns that exist across the tourism and hospitality sectors about the potential impact of a visitor levy. If the Government chooses to proceed with the levy, it must be designed with fairness, consistency and genuine engagement with the industry.

“These findings set out how any future levy should work for communities, visitors and businesses alike, while ensuring the essential safeguards are in place to protect jobs and economic growth. I hope the Government will give serious consideration to the recommendations in this report and learn from its findings.”

Allen Simpson, Chief Executive, UKHospitality

Allen Simpson, Chief Executive of UKHospitality, said: “These findings send a clear message to Government. A visitor levy would have ramifications across the hospitality ecosystem, affecting jobs, growth and the vibrancy of our towns and high streets. Visitor spending supports pubs, restaurants, attractions, cultural venues and thousands of local businesses and jobs across the country.

“The evidence gathered by this enquiry shows that introducing a new tax without the right safeguards risks increasing the cost of family holidays, reducing visitor demand and undermining investment at a time when businesses are already under significant pressure.

“The Government should think carefully about the impact this levy could have on families, the cost of living, communities and employment opportunities, especially for young people, before devolving these powers to mayoral authorities.

“There is an urgent need to consider the unintended consequences of a visitor levy and the practical recommendations set out in this report to mitigate its impact. If Government chooses to proceed, it must address the sector’s wider tax burden, establish a consistent national framework and ensure revenue is transparently reinvested in growing the visitor economy.”

The APPG will now share its findings and recommendations with Government as it considers its response to the consultation on the proposed introduction of visitor levy powers in England.