A City Tax, also called a tourist tax, is a fee that is paid by inbound travellers when they stay in hotels, resorts, B&Bs, hostels, vacation rentals, or other types of accommodation. Some UK cities, including Manchester, Liverpool, and Bournemouth, now impose a city tax on accommodation. Edinburgh will follow in 2026.
The tax or levies can be applied in the following ways:
Percentage
This article deals with a percentage - for illustration purposes, the procedure below will use a 5% charge.
You can also configure City Tax inclusive rates.
Create an auto add city tax - percentage value
⚠️ Important: For illustration purposes, the procedure below will use a 5% charge.
Follow the 4 steps below...
Step 1: Create a city tax analysis code
This only needs to be created once within the system. The benefit of creating an analysis code specifically for City Tax is this will show within the Period End reports with its own analysis code line, so that your finance team can easily track the city tax value.
The example above shows the CITY_TAX analysis code in the Non-revenue analysis codes, and is in the group MISC. Groups are used to organise analysis codes on the end of day and current period reports, with a total of each group’s codes shown at the bottom of the report.
To create an analysis code, follow the steps below:
Navigate to System, Codes and Rules, then Analysis Codes.
Click New Analysis Code.
Complete the information as required:
Analysis Code: Enter a code in capitals upto 12 characters long, using an underscore for a space. Do not start the code with a number.
🤓 Tip: For example, CITY_TAX
Group Code: Select where this analysis code will be stored within the left-hand menu.
Tax Rule: Select from the drop-down menu.
🤓 Tip: Check if the City Tax in your area incurs any additional charges, if not you may wish to select zero VAT rule.
Usage: Select from the drop-down menu for how to use this analysis code.
🤓 Tip: You may like to choose No Restrictions.
Description: Enter a clear description, which will be shown on invoices.
Revenue Type: Select Non-revenue from the drop-down menu.
🤓 Tip: If you do not have a non-revenue revenue type, you can create a non-revenue revenue type.
System Use: Do not select this box, this will make the analysis code un-selectable.
Click Save.
📌 Note: If you use the financial export routine, ensure that your accounts team are aware and that this code is mapped correctly once created.
Step 2: Auto Add City Tax
⚠️ Important: This option will not display the per cent charge per room per night in the total for stay or rate breakdown on the confirmation.
To add an automatic percentage per room per night, follow the steps below:
Navigate to System, Rates, City Tax and Surcharges.
Create a New Rule using the newly created analysis code, setting the following information:
Set the Description as it should appear on the guest bill.
Post to is where the charge should be sent, this was created in Step 1.
Mode can be set per room or per person as required.
📌 Note: If per person is selected, then you will be asked to see a value per person.
Value you can tick this to show variable rate with additional section to be completed.
Type is percentage to apply a percent value.
Apply Charges to either Nett or Gross.
Tax Mode determines if the calculated value should be treated as the Nett or Gross output.
Must stay can be set as required.
Stop charging after this can be completed as required.
Apply to reservations created on or after
Analysis Code is where the charge is calculated from, for example for Bedroom costs you may select Accommodation. Multiple Analysis codes can be selected.
Click Save.
Step 3: Add Auto Add City Tax to Rate Plans
To add auto add city taxes to rate plans, follow the steps below:
Navigate to your rates, via System, Rates and Rate plans, and apply the new City Tax rule to all of the rates that should use it.
Click Save Changes.
Step 4: Reservation Re-save
If you are setting this up for Edinburgh visitor levy then please view our specific article on this.
⚠️ Important: If you want these changes to affect immediately for all existing bookings currently within the system, you will need to perform a Reservation Re-save.
A reservation ‘re-save’ will process as follows:
It will recalculate the charges for all existing and future reservations. It will not affect any RESIDENT reservations (these will have to be amended manually, by reselecting the rate plan).
It will retain the current / total rate of the original reservation. Meaning that although the breakdown may have changed, the total original price will remain as it was. This includes overrides to rates, which will also remain at the overridden rate after the reservation re-save.
It will re-calculate projected revenue in any forecast reports. It will not change any close periods.
The re-save will affect ALL reservations. There isn’t a facility to re-save reservations on a specific rate plan.
City Tax display on reservations
You can see the City Tax charge breakdown within the individual reservation at the bottom of the Main page of the reservation:
You can also configure City Tax inclusive rates.