Overnight Visitor Levy Update for North Yorkshire

last updated: 2 November 2026

On 10 September 2026, the Government announced plans to give elected mayors in England the power to introduce an Overnight Visitor Levy (OVL), often referred to as a tourist tax. The levy would apply to overnight accommodation and could be used to generate funding for local infrastructure, public services, destination management and wider economic priorities. 

The Government consulted on the proposed powers between November 2025 and February 2026 and announced in the King's Speech 2026 that an Overnight Visitor Levy Bill would be introduced during the 2026-27 parliamentary session. 

While no final legislation has yet been passed, several mayoral authorities, including York and North Yorkshire, have been actively exploring how a levy could operate in their areas. Supporters argue it would provide a significant new source of funding to help manage visitor pressures and invest in local communities, while critics have raised concerns around visitor competitiveness, administrative burdens on businesses and whether income raised would be reinvested directly into the visitor economy. 

For York and North Yorkshire, early research suggests a levy could raise between £26 million and £52 million annually, depending on the level of charge applied. A levy could be charged as a fixed amount per night or as a percentage of the accommodation cost.  

Frequently Asked Questions 

Which businesses would the levy apply to?

The levy could apply to a wide range of overnight accommodation providers, including hotels, guest houses and bed and breakfasts, hostels, campsites, self-catering accommodation, short-term lets such as Airbnb properties, and university or religious accommodation when let on a commercial basis. Potential exemptions would be determined through the final legislation and any local implementation arrangements, with potential exemptions for lower-cost accommodation and campsites. 

How would the levy work? 

The Government's consultation proposed a percentage-based levy, although flat-rate charges are still being considered. Mayors would be able to determine local exemptions and decide which areas within their authority are covered by the levy. A cap on the number of nights for which the charge could be applied, preventing longer stays from incurring unlimited levy costs. 

VAT would be payable on the total cost of the overnight stay, inclusive of the levy. This is because the accommodation provider, not the visitor, is required to pay the levy. 

What is the cost implication for visitors?

The levy could be charged in different ways. For example, it could be a fixed amount per room per night, a fixed amount per person per night, or a percentage of the accommodation cost. In York and North Yorkshire, the Policy Lab report recommends a simple £1 per night flat-rate charge. Edinburgh currently uses a percentage-based model. 

How would it be collected? 

The York and North Yorkshire Policy Lab report recommends a simple digital collection system. However, no final collection process has been agreed and this would depend on the legislation and any future local scheme. 

How would the revenue be spent?

A visitor levy has the potential to generate significant revenue for the region, with research commissioned by the York and North Yorkshire Combined Authority estimating that a charge of £1 to £2 per night could raise between £26 million and £52 million annually across York and North Yorkshire.  

Under current Government proposals, revenue generated through a visitor levy could be used to support a broad range of local priorities, including transport improvements, regeneration projects, cultural assets, public realm enhancements and wider economic growth initiatives. There is currently no requirement for funds to be ring-fenced exclusively for tourism-related activity, although many industry stakeholders have called for revenues to be reinvested directly into the visitor economy. 

How would Mayors set a levy? 

Before introducing a levy, mayors would be required to publish proposals and undertake a formal public consultation. No formal consultation has yet taken place in York and North Yorkshire on whether a levy should be introduced. 

Have Tourism Business been consulted on their views? 

In January 2026, Visit North Yorkshire and North Yorkshire Council invited tourism businesses to share their views on the proposed introduction of an overnight visitor levy. The feedback gathered helped to inform the council's response to the Government's consultation. This was not a consultation on introducing a levy in North Yorkshire, but an opportunity for businesses to help shape the council's response to the national proposals.  

What happens next? 

This proposal remains at the development stage and no final decision has been taken on whether a York and North Yorkshire visitor levy will be introduced. 

We will update this page with more information in due course.