Edinburgh's tourist tax: Scottish Parliament committee backs general principles of Visitor Levy legislation

Majority of Holyrood committee says levy ‘unlikely’ to deter visitors from coming to Scotland

A cross-party committee of MSPs has backed the legislation giving Scottish councils the power to introduce a tourist tax, saying it was unlikely to deter visitors from coming to Scotland.

Edinburgh is expected to be the first place in Scotland to bring in the tax on overnight accommodation once the law is passed. A majority of members on the Scottish Parliament’s local government committee voted to support the general principles of the Visitor Levy (Scotland) Bill, although Tories Miles Briggs and Pam Gosal did not.

The committee took evidence from local authorities, hoteliers and others from the tourism sector before drawing up the report and said the levy had “the potential to bring significant benefits to visitors, the tourism sector and local residents”.

A majority of the committee agreed a tourist tax was unlikely to deter visitors from coming to Scotland. Picture: Lisa Ferguson.

It recognised business concerns around the timing of the legislation, following the impact of Covid-19 on Scotland’s tourism sector and the increased costs of doing business, as well as recent changes to short-term lets licensing. And the report also said the committee was “mindful” of fears that a levy would create an additional administrative burden.

But it said that “meaningful consultation with the tourism and accommodation sector to create a genuine sense of partnership working” would “help alleviate the concerns of many in the sector” and show that a levy should bring “long-term benefits” by improving the experience of visitors to areas where it is applied.

What is the Edinburgh tourist tax? Who will pay and how much? All you need to know about visitor levy

The committee came down against a nationally-imposed cap on how much could be charged under the levy, saying councils would be “unlikely to introduce a prohibitive rate that could deter visitors and impact negatively on local economies”.

It also supported decisions on how the revenue is spent being taken at a local level, and said the requirement that money raised should be reinvested locally in "facilities and services substantially for or used by persons visiting the area" was broad enough to allow “real flexibility” in spending priorities. The committee added there were many examples where spending could benefit visitors and locals alike.

The Bill requires the levy to be set as a percentage of visitors’ accommodation bills, rather than being a flat-rate charge, but the committee said the majority of businesses would prefer a flat rate for ease of administration, and urged the Scottish Government to undertake further work with the tourism sector, local authorities and others “to reach an agreed solution”.

The committee emphasised the importance of “robust consultation with all relevant stakeholders” before a levy is introduced, but a majority of members considered the Scottish Government’s proposed 18-month lead-in time “could be considered excessive” when compared to what has happened in other countries, and urged the Scottish Government to respond to calls from Edinburgh and Highland Councils for it to be reduced to 12 months or determined at a local level.

Committee convener Ariane Burgess said: “In supporting the Visitor Levy Bill at Stage 1, a majority of the members of the committee recognises its potential to positively impact Scotland's tourism sector.”

The Scottish Parliament as a whole will be asked to vote to support the general principles of the Bill after they return from the Christmas and New Year recess.