The UK is considering a proposed ‘tourist tax’ on Australian tourists staying in campsites, hotels and bed and breakfasts.
British Chancellor Rachel Reeves is studying the tax in a bid to raise about $2 billion to shore up the country’s coffers as economic growth falters.
It is understood that Treasury officials carried out “modelling exercises” to see the economic benefit of introducing the tax.
The new plan would start at about A$2 per person at a campsite and rise to $30 per person at a five-star hotel.
But both UK residents and tourists from around the world would have to pay the tax.
The ‘hotel tax’ would follow a tourist tax applied in France and a proposed visitor tax in Wales, which would be paid by visitors and collected by accommodation providers.
Chancellor Reeves declined to comment on the issue when asked by reporters about her current trade visit to China.
A British Treasury spokesman added: “We do not comment on tax speculation outside of tax events.”
The UK is considering a proposed ‘tourist tax’ on Australian tourists staying in campsites, hotels and B&Bs

The British government is considering imposing a ‘hotel tax’ on tourists, according to insiders
The government is hopeful the tax can rise enough to support public spending, following increases in government borrowing costs in the UK.
The measure has the potential to raise around A$2 billion a year, according to the TaxPayer’s Alliance.
One city in England already imposes a tourist tax on overnight visitors.
In Manchester, the City Visitor Charge requires visitors to pay around A$2 per room, each night of their stay.
In April 2024, officials revealed that the tax had raised around A$5.5 million in its first year.
The funds were spent on street cleaning and marketing campaigns for the city, spokesman Kumar Mishra said at the time.
British hotelier Sir Rocco Forte, one of the United Kingdom’s most prominent businessmen, warned that the tax could damage the country’s tourism industry.
“Travel and tourism is one of the most vital parts of the UK economy, with the industry contributing more than £250 billion (A$495 billion) a year to the UK’s GDP and supporting 3 .5 million jobs,” he said.
“Apart from the smallest businesses, everyone trying to make a living in this area is affected by the government’s increase in employers’ social security and the entire industry suffers from the refusal to reinstate tax-free shopping for tourists.”
The move would follow a previous tax imposed on UK visitors that meant tourists can no longer reclaim VAT – roughly equivalent to Australia’s GST – on their purchases.
‘This would be a new pernicious tax that would be added to all other taxes. “The UK is no longer a cheap destination, and this can only deter cost-conscious visitors who will increasingly choose to go elsewhere,” he said.
The chancellor told reporters in China that her budget “is not negotiable.”
“The fiscal rules I established in my budget in October are non-negotiable, and growth is the number one mission of this government to improve the situation of our country,” he said.