Could Cumbria introduce a tourist tax? What it may mean for visitors, residents and businesses
Tourism businesses across Cumbria are being urged to prepare for the possibility of a new charge on overnight stays.
The proposed visitor levy is not yet confirmed. No tourism tax is currently in place in Cumbria, and one is not expected before 2028 at the earliest.
However, the mayor elected to lead Cumbria in May 2027 is expected to receive the power to introduce a local levy on overnight accommodation. This could affect hotels, guest houses, holiday cottages, caravan parks and other places offering paid stays.
What would a tourism tax involve?
The government has been consulting on plans to give mayoral authorities in England the power to charge visitors staying overnight.
The final system has not yet been decided. Questions remain over whether the levy would be a flat fee or a percentage of the accommodation bill, which properties would be covered and how the money would be collected.
It would be up to local leaders to decide whether Cumbria should introduce a levy. They would also need to set out how the money would be spent.
Similar schemes elsewhere include flat charges of £1 or £2 per room each night in Manchester and Liverpool. Edinburgh has introduced a five per cent charge on overnight accommodation. These examples do not mean Cumbria would use the same rates.
Why are businesses concerned?
Cumbrian accountancy firm Lamont Pridmore has warned tourism operators to start considering the possible impact.
Chief executive Graham Lamont said Cumbria attracts an estimated 41 million visitors each year, meaning any change could have a wide effect on the county’s economy.
Many local accommodation businesses are small, family-run operations. Caravan parks, cottages and guest houses may also work with tighter profit margins than larger city hotels.
Businesses could face extra work through collecting the levy, keeping records and passing the money to the relevant authority. They may also need to update booking systems and explain the extra charge to customers.
There is concern that higher holiday costs could discourage some visitors or leave them with less money to spend in cafés, shops, pubs and attractions.
Lamont Pridmore said 77 per cent of businesses questioned in a recent Cumbria Tourism survey were worried about rising costs. The firm is advising operators to include the possibility of a levy in their medium-term financial planning.
Could businesses simply pass the cost to tourists?
The charge would normally be paid by the visitor, but accommodation providers may still feel its impact.
Some businesses could add the full levy to the customer’s bill. Others may choose to absorb part of the cost to keep their prices competitive.
Either option could create pressure. Passing on the full charge makes a stay more expensive, while absorbing it reduces the business’s income.
Tourism firms already pay the standard 20 per cent VAT rate on many services, and industry representatives argue that a new charge would add to an already high tax burden.
What could it mean for tourists?
Visitors staying overnight may see an extra item added to their accommodation bill.
The total cost would depend on the model chosen. A flat charge could add a set amount for every room or person each night. A percentage model would result in a larger charge for more expensive accommodation.
Day visitors would not normally pay an overnight levy. This is important in Cumbria, where more than 33 million day trips were recorded in 2024.
Visitors staying with friends or relatives would also be unlikely to face the charge because the current proposals focus on commercially let accommodation.
How could local residents benefit?
Supporters argue that a visitor levy could help pay for services placed under pressure by millions of visitors.
Money could be spent on public toilets, waste collection, buses, roads, footpaths, heritage sites and environmental projects. Local authorities could also use it to improve visitor facilities and support events.
Friends of the Lake District says tourism puts pressure on roads, parking, paths, verges, lakes and other public services. It argues that a visitor charge could provide a fairer way to fund improvements.
A poll commissioned by the charity found that 68 per cent of Cumbrian residents and 64 per cent of past or future visitors supported a charge when the money would directly protect and improve the Lake District.
The Local Government Association has also argued that money raised should stay in the area. It says the funds could support parks, public toilets, transport, waste services, culture and heritage.
Could locals also lose out?
Residents could be affected if the levy led to fewer visitors or lower spending.
Tourism supports a large number of jobs across Cumbria. Hotels and holiday parks also help generate customers for shops, restaurants, taxis and attractions.
A poorly designed charge could therefore reduce income for businesses that do not collect the levy themselves but rely on visitors.
There may also be questions over whether Cumbrian residents taking a short break elsewhere in the county would need to pay. Any exemptions would depend on the final rules chosen by the government and the future mayoral authority.
What happens next?
The government consultation on the national visitor levy framework closed in February 2026, and ministers are considering the responses.
Cumbria’s first mayoral election is due to take place in May 2027. The new mayor could then decide whether to explore a levy, but a scheme would require further consultation and detailed local plans before it could begin.
For now, no rate has been set and no decision has been made to introduce the tax.
Lamont Pridmore said businesses should prepare for the possibility without assuming it will happen. The firm added that the success of any scheme would depend on proper consultation, simple administration and clear evidence that the money was being reinvested in Cumbria.
