The overnight visitor levy could generate more than £350m for the capital, research has found.

A report by Central London Forward (CLF), a partnership of the 12 central London local authorities, says the tourist tax has the potential to raise annual revenue of £275m for CLF boroughs.

With councils calling for a minimum of 50% of the revenue, CLF says this would help alleviate the rising costs created by tourism that overstretch council budgets.

The CLF’s analysis found that the tax would support Central London boroughs in the sustainable management of visitor pressures, even if it was a ‘modest, globally standard levy’ that was introduced.

It also suggests that the levy would help to expand the visitor economy and preserve essential community services.

Outlining two ‘internationally common approaches’, the report reveals that a £2 per person per night flat rate would generate £169m annually for CLF boroughs, while a 3% room cost charge would unlock £275m per year, with the latter suggested to be a ‘fairer’ method due to its automatic adaptation based on inflation and demand.

Cllr Adam Hug, Chair of Central London Forward and Leader of Westminster City Council, said: ‘Central London boroughs play a crucial role in ensuring the visitor economy grows and thrives.

‘We work to keep the streets clean, well maintained and safe, we invest in new public realm projects from the transformation of Regent Street to upgraded public loos in my own borough and we work with businesses to give them the support they need to grow.

‘Many of these services for visitors are currently funded by our local residents which is not right. The Government should legislate to ensure that at least 50% of the revenue raised by an overnight stay levy is kept by London boroughs, so we can continue providing the services London needs.’