England's tourist levy arrives with no legal cap on the rate

Regional authorities in England will be able to levy a percentage charge on overnight stays in hotels, guesthouses, B&Bs and holiday rentals. Ministers confirmed the design when they published consultation findings on 10 September.

The charge is discretionary. Each authority decides whether to impose one.

The maximum rate has been left uncapped by design. There is no ceiling written into the proposed framework.

Labour's ten regional mayors have promised to hold their local rates at 5%. That promise has no legal force, and nothing stops a successor or a different administration raising it.

Nobody pays anything yet. A bill still has to pass, and authorities are not expected to publish spending plans until early 2028.

Local leaders must also decide whether to charge at all, consult businesses and work out collection.

The English design differs from Scotland's. Edinburgh's scheme is a flat 5% capped at five nights.

That leaves operators facing dozens of separate regimes, each with its own rate, timetable, spending plan and exemptions, rather than one national rule.

Trade bodies have lined up against it. ABTA argues a percentage model falls hardest on luxury and boutique accommodation compared with a flat nightly rate. UKinbound wants a fixed national system instead of a patchwork.

The World Travel and Tourism Council warns that higher trip costs push both holidaymakers and investment towards rival destinations.

UKHospitality goes furthest. On the trade body's own projections, an uncapped charge would cost the sector £1.6bn, add £100 to a typical family holiday and put up to 33,000 jobs at risk. Those are its figures, not official ones.

Government officials make the opposite case: that targeted levies pay for the facilities that keep destinations worth visiting. The Liverpool City Region expects a levy could raise up to £18m a year for events, cultural projects and transport, on its own forecast.

Operators already inside a levy regime describe the squeeze. Amy Boyton, director of franchise sales at Pass the Keys, said local managers in Edinburgh and Glasgow are choosing between absorbing the cost and raising prices by 5%, and that some Scottish hosts are weighing a move to mid-term lets.

Not everyone expects a demand shock. Julia Doust, founder and editor of The European Compass, said a tourist tax made no difference to bookings at the 21-room establishment she owned in France.

For anyone running accommodation, taking bookings or budgeting business travel in England, the planning problem is the spread of rates rather than the rate itself. Pricing for 2028 stays will need to survive a levy whose ceiling nobody has yet agreed to write down.