Reeves could allow holiday tax on English hotel and Airbnb stays

UKHospitality estimated that a 5% holiday tax would cost Britons £518m in additional costs. Photograph: Lars Zahner/Alamy

British holidaymakers could have to pay a nightly tax on hotel stays and Airbnb-style visits in plans expected to be announced by Rachel Reeves in the budget next week.

The chancellor is reportedly preparing to give mayors powers to raise taxes by charging tourists on the cost of an overnight stay in their cities.