Nottingham hotels and serviced apartments could face a new visitor economy levy from 2027 if accommodation businesses back revised plans for a dedicated Accommodation Business Improvement District.
Nottingham City Council is being asked to approve the next procedural steps for a possible Accommodation Business Improvement District, known as an ABID, at a Full Council meeting on 13 July 2026.
The report does not ask councillors to approve the levy itself. Instead, it seeks authority for senior officers to assess any formal proposal, and, if it meets legal requirements, instruct the council’s Returning Officer to hold a ballot of eligible businesses.
The proposal is being led by Nottingham BID Company, which operates the existing Nottingham city centre Business Improvement District under the “It’s in Nottingham” brand. That wider BID was renewed for a further five-year term after a ballot of city centre businesses in July 2025. Nottingham City Council collects the existing BID levy and passes it to the BID body to fund city centre activity.
An ABID would be more specific. It would apply only to eligible accommodation providers, including hotels and serviced apartments, within a defined area. The report says such schemes are used to fund activity linked to the visitor economy, including destination marketing, events and initiatives intended to increase visitor numbers and spending.
Under the expected model, eligible accommodation providers with a rateable value above a defined threshold inside the city boundary would pay a levy based on a £2 per room, per night charge. The council report estimates this could raise around £1 million a year, depending on the final scheme design and occupancy levels.
A previous Nottingham ABID proposal was developed after a feasibility study in 2023 and consultation with accommodation providers. That plan was expected to generate about £800,000 in its first year, rising to more than £1 million a year afterwards, but it was rejected in a ballot in October 2025 by a majority of one vote among eligible businesses.
The report says Nottingham BID Company has continued discussions with the accommodation sector since that result and believes there remains “broad in-principle support” for investment in the visitor economy. It notified the Secretary of State on 11 December 2025 that it intended to ask the council to put a further proposal to ballot.
A final compliant proposal has not yet been received by the council. However, the BID proposer is understood to want any successful ABID to begin operating on 1 January 2027 for an initial five-year period. Council officers say waiting until the next Full Council meeting in September to deal with the issue would not leave enough time to hold a ballot, complete an operating agreement and issue accurate bills if the proposal is approved.
The report stresses that the council’s role is statutory and administrative. It does not promote or approve the business case for a BID on its merits. Its responsibilities under the Business Improvement Districts (England) Regulations 2004 include checking whether a proposal complies with the regulations, considering whether it conflicts with adopted council policy, administering any ballot through the Returning Officer, collecting the levy if approved, and entering into the necessary legal agreements.
If a compliant proposal is received, the council is required to move to a ballot and cannot withhold one on discretionary grounds. If the ballot is successful, the council would still have to consider whether any legal grounds for a veto apply before the ABID could proceed.
The report also notes a wider regional issue. Since the failed 2025 ballot, the UK Government has consulted on giving mayoral authorities, including the East Midlands Mayoral Combined Authority, powers to introduce an overnight visitor levy. The council report says this could provide an alternative way of raising revenue from visitors, but that it would differ from an ABID in governance and control and remains dependent on legislation and implementation timescales.
Nottingham BID Company is understood to have engaged with the East Midlands Mayoral Combined Authority while developing revised proposals. The council expects any final ABID proposal to include clauses dealing with what would happen if an overnight visitor levy was later introduced in the East Midlands and affected accommodation providers in Nottingham.
For the city council, the report says there would be no direct financial implications from holding the ballot because Nottingham BID Company has confirmed it would cover those costs. If the ballot succeeds, the council would collect the levy as billing authority and transfer it to the ABID body. It would not retain the funds, apart from agreed administrative costs.
The council expects administration of the scheme to require around 0.2 full-time equivalent staffing in economic development, currently estimated at Grade E. Those costs would be recovered through fees set out in the operating agreement, which the report says would avoid additional pressure on council budgets.
The report also identifies risks including regulatory compliance, ballot administration, financial exposure, possible duplication with existing BID or council-funded visitor economy work, and the need to avoid giving the impression that the council is promoting the proposal. It says legal advice would be used before any decision, a compliance assessment would be documented, and council communications should make clear that the proposal is business-led and subject to ballot.
If Full Council agrees the recommendations on 13 July, authority would be delegated to the Corporate Director for Growth and City Development, in consultation with the Executive Member for Leisure, Culture and Tourism. They would be able to receive any new ABID proposal, assess whether it complies with the regulations, consider any conflict with council policy, instruct the Returning Officer to hold a ballot if appropriate, and enter into an operating agreement if the ballot is successful and no veto is used.
The decision before councillors is therefore about process, not the final introduction of the levy. The ABID can only be established if eligible accommodation businesses vote in favour in a formal ballot.
