'Tourist tax': Will the Island follow our neighbours in implementing levy?

England set to become latest place to impose a charge

Local mayors in England could soon introduce an uncapped so-called 'tourist tax' for overnight stays.

The fee - which would be charged as a percentage of accommodation costs - was discussed at a meeting in Number Ten North today (10 September).

Hospitality leaders there say it could hit working families hardest, with firms warning the move would be 'hugely damaging'.

Indeed, some are calling for it to be set at a flat rate to avoid pricing people out of a British holiday.

The UK government has said it will introduce a bill to Parliament 'in due course' to bring in the changes.

But could we see a similar levy imposed here?

Well, the idea has been mooted before.

BACKGROUND

In July 2025, the Department for Enterprise - and by proxy, Visit Isle of Man - was tasked with 'investigating a "tourism levy pilot", with funds raised being utilised for developing, supporting or promoting the Island's visitor economy and the Island as a visitor destination".

The department had to report back by February this year, which it did, with a 'Tourism Levy Report' placed before Tynwald's April sitting.

You can find it HERE.

The report from Visit Isle of Man examined the concept and how it would work in practice, both in terms of growing and managing tourism.

It cited schemes seen elsewhere, such as in Amsterdam, Berlin, Barcelona, Paris and Rome, whose taxes range from around €2 to €16.

For instance, Berlin introduced a tourism accommodation tax of 5 percent in 2014 as a means of improving the city’s finances. 

In 2024 the exemption for business travel was removed and, in 2025 the rate was increased to 7.5 percent. 

It applies to all accommodation types from hotels through to homestays and camping sites.

In most places, the 'tourist tax' is reinvested back into the city's infrastructure, and in some cases, like Amsterdam, it is used to try and control the amount of tourists who want to visit.

Amsterdam's policy is dubbed 'Tourism in Balance' and actually actively seeks to reduce visitor numbers as tourism generates pressure on public space, housing, and services there.

ISLE OF MAN

Now in terms of a Manx tourist tax, the report stated that any funds raised here 'could be focused on driving visitor economy growth'.

It said: "Additional funds generated through any levy could also be used to improve the product, for example, protecting and developing heritage railways and national heritage sites, developing cultural and art initiatives or funding the upkeep of the Raad Ny Foillan coastal path. 

"A tourism levy may represent a significant opportunity for the Island from both a social and economic perspective. 

"While recognising the importance of the hearts and minds campaign to support engagement and delivery, Visit Isle of Man believes that any solution does not need to be a 'tourism tax', but rather a partnership between stakeholders, Islanders, and visitors. 

"It is proposed as a sustainable funding mechanism to accelerate delivery. 

"Visit Isle of Man recommends that any Levy introduced in the Isle of Man is a collaborative, not punitive, focus on partnership, integrated registration, visitor engagement and regenerative/purposeful tourism approach."

WHAT DOES THAT ACTUALLY MEAN?

The agency pointed to a number of initiatives already operating here which 'could be considered similar in principle to a tourism levy of some form'.

For example, of the 1,670 passengers on the HX Hurtigruten in 2023, 18 percent took part in beach cleaning excursions with Beach Buddies, raising £2000 for the charity.

It argued that this evidenced visitors to the Island making an in-kind contribution towards charitable or volunteer initiatives linked to sustainable tourism, without it being an explicit 'tourist tax'.

Meanwhile, Island Escapes has been taking a £3 voluntary donation per booking since 2018.

This, Visit Isle of Man said, had raised £25,000 for the Manx Wildlife Trust and £5,000 for Culture Vannin, and had seen a less than one percent opt-out rate, even during pandemic staycations.

It argued that voluntary levies such as this show 'strong consumer acceptance, especially among eco-conscious travellers'. 

RESPONSE

But what was the verdict on the street?

Manx Radio asked visitors at the time what they made of the idea, and the resounding response was not a positive one.

You can read more HERE.

In fact, local businesses agreed.

A hotelier told us that introducing a tourist tax would be the 'wrong move at the wrong time'.

There were worries such a move could force local businesses to close, if we saw visitor numbers drop as a result.

You can read more HERE.

And when we put it to the enterprise minister back in April, we were told there are no plans to bring in such a levy yet, but that it was important it be kept under consideration for the future.

You can read more HERE.

THE NORM?

Ultimately, a tourism levy may not be introduced on the Isle of Man any time soon.

But don't be surprised if it becomes a topic for Tynwald, or for the incoming crop of new MHKs in the House of Keys.

If England does approve such a levy - it certainly won't be the first place in the British Isles to do so.

In Wales, a capped levy of £1.30 per person per night is set to be introduced in April next year.

In Scotland, local authorities can charge a visitor levy on overnight accommodation.

Edinburgh launched the first in July this year, with a rate set at five percent, capped at five nights.

Other Scottish cities like Glasgow and Aberdeen are set to follow suit in 2027.

So... watch this space?