Tourist Taxes to Spread Across UK in Overtourism Fight

Skift

28-05-2025

Edinburgh will soon charge hotel guests an extra 5% tax, and the idea is catching on fast across the UK, impacting hotels, short-term rentals, and cruise lines.
A cascade of tourist tax proposals is sweeping across the UK after Edinburgh became the first British city to approve a 5% hotel bed tax starting July 2026.
Edinburgh's move, announced last August, has triggered a wave of similar tourist tax proposals across Britain as cash-strapped local governments eye taking a cut of tourism revenue while making it costlier to visit.
Half of Scotland's local authorities are now developing similar levies, with Wales poised to vote on its own tourist tax legislation this summer, and some UK cruise ports are considering levies on passengers, too.
Why now? Scotland last year became the first part of the UK to enable localities to charge visitor levies.
The push stems from a practical constraint: Scotland's devolved government cannot create new national taxes without approval from the UK Treasury, which routinely refuses such requests, according to an inteview with Ross Greer, a Scottish Greens member of parliament.
Edinburgh's announcement of a new visitor tax came during the city's festival season when four million visitors arrive each year in the town of 500,000 as part of a long-running live tourism experience.
Other UK towns have grown increasingly frustrated with overtourism, making the tax politically palatable despite opposition from the hospitality industry, which fears that taxes could reduce tourism spending and add a compliance burden.
Exhibit A is the Scottish Highlands, which, at almost 10,000 square miles of picturesque scenery, relies a lot on tourism. The Highlands Council estimated a levy could be worth £10 million (about $13.5 million).
Wales is advancing similar visitor levy legislation, which would also introduce licensing requirements for hotels and short-term rentals. Northern Ireland is exploring comparable measures.
The tourism tax trend reflects broader tensions over tourism's economic impact. While visitors bring spending, they also strain infrastructure and drive up housing costs. Tourist taxes offer local governments a way to capture revenue while potentially managing visitor flows. But local businesses say they could hurt overall tourism revenue.
UK Cruising May Face Taxes, Too
The tax wave isn't limited to hotels. Scottish ports are considering locally applied cruise passenger levies, backed by groups including the typically tourism-friendly Orkney Islands Council.
Scotland welcomed 1.2 million cruise passengers last year, nearly half the UK total.
The cruise industry warns that a patchwork of different charges could drive business elsewhere.
"There are other destinations," said Andy Harmer, managing director of Cruise Line Industry Association, United Kingdom & Ireland. "What we don't want is Scotland seen as an unattractive place to do cruise business."
Greer told Skift that the Green party proposed the tax as a way to help communities derive financial benefit from tourism as well as a way to discourage excess ship emissions.
Due to differing local priorities and decisions about levies, the association suggested some ports may be disadvantaged over others.
The Scottish government's consultation on cruise taxes runs through May 30, with a decision expected afterward. Meanwhile, other regions watch Edinburgh's experiment closely.
Tourist taxes aren't new globally. Cities from Amsterdam to Venice have implemented various levies, with mixed results. Some claim to have successfully tamed overtourism while generating revenue. Others have faced legal challenges or seen tourism shift to untaxed neighboring areas.
Possible Visitor Levies in England?
In England, county-level authorities are watching Edinburgh's bed tax with interest.
Some authorities in England's Lake District have lobbied for similar taxation powers. This year, the Lake District published a report looking at the opportunities of a similar tax in the English National Park and UNESCO World Heritage Site, which sees around 20 million visitors a year.
England faces legal hurdles in applying visitor taxes that Scotland avoided. Most English authorities lack the devolved powers, the report's author, Davina Stanford, told Skift.
Manchester represents a special exception, with some devolved powers under the mayor of Greater Manchester. However, its Business Improvement District bed tax only applies to the city center.