Members of Parliament have disagreed over whether short-let owners should be required to collect a visitor levy under plans being developed for English councils.
During a Westminster Hall debate, Labour MP Rachel Blake said short-term lets should pay the levy, which should be implemented in a way that makes sure we can gather data on who is letting out their home on a short-term basis.
Housing Minister Alison McGovern told MPs that the consultation – which closed last month – proposed that the levy would apply to commercially let short-term accommodation, but added that the government will say more when it brings forward detailed proposals.
Mixed reception
Conservative MP Damian Hinds argued the levy would not solve the question of whether short lets push up rents. He also expressed doubt that the government would keep its promise to ringfence money raised for local investment.
Hinds pointed out that England’s VAT rate of 20 per cent compares unfavourably with European countries that have introduced visitor levies, where VAT is typically 10 per cent. He warned the tax is a bad idea from the point of view of the cost of living, claiming it would add over £100 to a typical holiday for a family of four.
This follows Residential Landlord’s coverage of calls for councils to gain new powers over short lets, as local authorities seek greater control over holiday accommodation in their areas.
Day-trippers escape
Liberal Democrat MP Tom Gordon described a fundamental flaw in the proposals, arguing they would tax overnight stays rather than tourism itself.
“Day-trippers, who often add strain to local infrastructure pay nothing, but those who stay overnight, supporting local jobs and businesses, pay more,” he said.
The minister insisted any money raised through a visitor levy should be reinvested in those places where it is generated. In the consultation, we asked about a percentage-based rate which would scale with the cost of a stay, but we also recognise the potential benefits of alternative approaches, such as a flat-rate model.
Scotland has already moved ahead with similar plans. Edinburgh’s 5 per cent charge on overnight accommodation is due to launch in July, making it the first UK city to implement such a scheme. The Welsh Government recently confirmed short-lets licensing from 2029.
Strategic authorities
The Chancellor announced plans last November to roll out the tax across England, with mayors of strategic authorities given powers to introduce the charge. The levy is expected to be a few pounds per person per night, giving local leaders additional resources to invest in their economies while potentially helping to manage visitor numbers in popular areas.
The devolution framework underpins the government’s plans to give mayors and combined authorities greater local powers, including over tourism and visitor management.
Opinion
The debate highlights the tension between local authorities seeking new revenue streams and concerns about adding costs for visitors. Whether short-let owners end up collecting the levy could significantly affect compliance burdens for landlords who use their properties for holiday accommodation. The exemption question matters – if hotel chains must collect but private short-lets do not, it creates an unlevel playing field.
