Travelling businessmen and people visiting sick relatives will have to pay Andy Burnham's holiday tax – but MPs will be able to bill taxpayers for their hotel stays.

Anyone spending the night in a hotel, guest house or Airbnb for will have to pay the new Overnight Visitor Levy when it is introduced by Labour mayors.

Figures from the Great Britain Tourism Survey show that business people accounted for 16million overnight stays in 2024 while people visiting friends and relatives made up another 110m of the 307m total.

Allen Simpson, Chief Executive of UKHospitality, said: 'The holiday tax will hike costs for everyone staying in accommodation, including for the millions of Brits who spend 16 million nights in accommodation each year on business.

'A self-employed builder, for example, may have no choice but to stay in a hotel when they're working away from home during the week, and now that stay will become significantly more expensive.

'Families, workers, and many more will be forced to pay more as a result of this unpopular and costly tax, not to mention the 33,000 jobs it risks. The Government should rethink and scrap proposals for its uncapped holiday tax.'

In a Commons debate on the controversial charge on Tuesday, the Tories said it was unfair that people who are not tourists would be hit by the holiday tax – adding 5 per cent to the cost of their accommodation.

Shadow Culture Secretary Rebecca Paul said: 'It is not just Brits on a staycation who will be impacted—it will be anyone staying overnight for any reason, such as visiting a sick relative, going away on business or travelling for medical treatment. Why on earth should those people be taxed simply for going about their daily lives? It is not fair.'

She said it would damage jobs in hospitality as well as being a 'tax on hard-working British families'.

Labour MPs also urged ministers to exempt young people and respite holidays for disabled people from the looming charge.

Jonathan Davies said: 'I recently visited Drum Hill Scout Camp in my constituency. It welcomes many thousands of young people from quite far afield to learn absolutely fantastic life skills. And I've also engaged with organisations that provide respite holidays for disabled people.

'I know local leaders can decide how to how to shape the legislation locally, but can we provide an exception for those kind of groups on the face of this bill?'

Labour's Emma Lewell blasted: 'My constituents, family-run B&Bs, caravan parks, hotels and wider hospitality industry have been unequivocal with me that they do not want this measure. It is the wrong tax at the worst time. The extra burden on their business will tip my local industry over.'

However it has also emerged that MPs themselves will be able to claw back the cost of the holiday tax on their Parliamentary expenses when they stay in hotels for work.

Those who represent constituencies outside London are allowed to claim as much as £230 a night for staying in hotels in the capital, with some £700,000 paid out in 2025-26.

A spokesman for the Independent Parliamentary Standards Authority (IPSA), the Commons pay body, said: 'MPs who represent constituencies outside of London are eligible to receive funding for work-related travel and accommodation.

'When an MP stays in a hotel for work, IPSA provides reimbursement against strict nightly limits (up to £230 per night in London). This is a total figure, which includes any taxes and levies.'