The Institute of Chartered Accountants in England and Wales (ICAEW) has urged the UK Government to proceed cautiously with proposals to implement a visitor levy in England, warning that many hospitality businesses are already under strain.

This call follows the ICAEW’s latest Business Confidence Monitor, which reported that 64% of businesses see the tax burden as an increasing challenge.

In November 2025, the government launched a consultation on plans to give mayors in England powers to introduce a local visitor levy on overnight accommodation. Visitor levies are due to become operational in Scotland later this year and in Wales from 2027.

Responding to the consultation on the visitor levy, the ICAEW said that if ministers decide to proceed, the legislation should establish a statutory national model.

It argued that this would avoid a mix of different local schemes that could raise costs, create extra bureaucracy and delay the point at which revenue reaches local authorities.

The ICAEW said that, given the pressures on businesses, any move in England must be designed and implemented with particular care.

The institute said a single national framework is needed so accommodation providers, online platforms and councils can apply the levy consistently.

Under its proposal, local leaders could adopt this national model after a set notice period, while any departure from the standard scheme would require full consultation where local circumstances justify it.

To keep the system clear and manageable, the ICAEW recommended a flat-rate charge per night. It said this would make pricing more transparent and remove the need to split out elements of package deals.

The institute also called for exemptions to be defined at national level only.

It warned that locally set exemptions could result in a “postcode lottery” of tax rules and increase compliance demands for businesses operating in more than one area.

The ICAEW also suggested a national cap of 28 nights so that the levy aligns with existing value added tax (VAT) rules on long-stay accommodation.

It recommended a minimum 12-month notice period before any levy is introduced, alongside “grandfathering” measures to protect existing advance bookings.

Additionally, the ICAEW proposed a centralised collection system. Under this model, payments would be made via a single national portal and then distributed to the appropriate local authorities.

ICAEW VAT and Customs technical manager Ed Saltmarsh said: “Our members tell us that doing business is too complicated, too expensive and too uncertain, and the introduction of another tax will add to the burden that hospitality firms are already under.”