UK Budget 2025: key measures affecting the visitor economy

The Chancellor of the Exchequer, Rachel Reeves MP, has this week (Wednesday 26 November) delivered the UK Government's 2025 Budget. The Government has provided the following roundup of the key measures that are set to affect the visitor economy:

A range of measures have been announced as part of the Budget, most notably a consultation on powers to allow local authority Mayors to introduce a visitor levy for their regions. Linked below are three factsheets covering the key measures:

• Tax Support for Businesses
• Driving Economic Growth
• Cutting the Cost of Living

You can read the full Budget 2025 document online here. 

Measures affecting the visitor economy are as follows: 

Visitor Levy 

The Government is giving Mayoral Strategic Authorities in England the power to create local overnight levies and have today launched a consultation seeking views on the design of this new power. This includes consulting on how any revenues collected should be used, the types of accommodation that will be included, and how levy rates should be calculated. 

The consultation closes on 18 February 2026, and the Government encourages businesses and industry bodies to engage by following this link. 

Business Rates 

The Budget committed to ensuring permanently lower business tax rates for over 750,000 retail, hospitality and leisure properties, worth nearly £900 million a year from April 2026. There will also be a £4.3 billion business rates support package, which will cap business rates bill increases for sectors hit hardest by revaluations from April 2026. This will include a £3.2 billion transitional relief scheme to provide more support to the largest ratepayers, including airports and hospitality, and an expansion of the Supporting Small Business scheme to help the smallest businesses. 

Also being introduced is a permanent 40% First Year Allowance for main rate assets, giving businesses a strong incentive to invest in the future. The £1 million Annual Investment Allowance offers is being kept to offer immediate tax relief on plant and machinery equipment.

SMEs

The Government is aiming to support small businesses to grow, by providing an additional two years of small business rates relief when they open a second premises, and continuing their work to transform business rates by publishing a call for evidence exploring how to tackle barriers to investment.