Edinburgh tourist tax: Visitor levy likely to be four per cent as city welcomes switch from flat-rate charge

Council leader Cammy Day wants scope for spending the money raised to be ‘a bit wider’ to ensure whole city benefits

Visitors to Edinburgh are likely to face a levy of up to four per cent on the cost of overnight accommodation when the Capital introduces a tourist tax.

The city council previously agreed a flat-rate of £2 per person per night for the planned tax, but the legislation unveiled last week requires the visitor levy to be set as a percentage rather than a flat-rate charge. City council leader Cammy Day welcomed the change, saying it was fairer. He said there had been no discussion yet about what the rate would be.

But he added: "I think somewhere between two and four per cent seems reasonable. That seems to be the norm across the world and different parts of Europe. What we will look to set is a fair percentage level that reflects the offering of a capital city that is billed as the best city in the world to visit."

Visitors to the Capital are set to face a levy of up to four per cent on the cost of overnight accommodation when the tourist tax is introduced.

Cllr Day said with hindsight the planned flat-rate charge of £2 per head now looked "quite a low price" and international comparators were set “a bit higher than that”. He said: "We absolutely support a percentage. It seems fairer to say that whether you're in a small B&B in Pilrig or a grand hotel in the city centre that you pay a percentage of that cost rather than a flat rate which seems a wee bit unfair."

And he noted another benefit of a percentage tax: “Rather than having a discussion every year about whether we would increase it or not, having a percentage allows that just to go along with the price of hotel rooms.”

Under the Scottish Government’s proposed legislation it will be up to councils to decide whether they want to introduce a visitor levy in their area, and the revenue raised by the new visitor levy will have to be reinvested in "facilities and services substantially for or used by visitors”. Launching the Visitor Levy (Scotland) Bill, public finance minister Tom Arthur spoke of “flexibility” to allow for different priorities in different areas. But Cllr Day said the scope for spending the money brought in by the tax needed to be “a bit wider than the government has set out” so it benefited the whole city.

He said: “I've written to the minister and he has confirmed that any tourism levy revenue would be over and above our block grant, which we appreciate. And if he's saying it will be for councils to decide what to spend it on then that is hugely welcomed and I hope that's what the legislation says when it's finalised. We think the decision on the level and what it should be allocated for is a decision for the city – and that would include representatives from the tourism industry.”

He said an obvious priority which the levy could help fund was the extra cleansing teams to keep the city clean at the height of the tourist season. And he gave a example of another plan he hoped could be funded from the levy. "We’ve already agreed the city should look to expand the Festival offerings beyond the city centre, which might mean investing more money in parks and upgrading some performance spaces, and these would be available throughout the year for communities to use, so it benefits tourism but also gives a lasting legacy for communities.”

The legislation allows councils to set a different rate of levy for special events, such as the Festival. Cllr Day did not rule out such a move but said the council did not have plans for a higher rate in August. “We want to have a fair levy on tourists, it's not about making the experience too challenging for tourists. We don’t have any particular plans to increase it during Festival time. It's not something we've lobbied for, we've lobbied or fair levy for the capital city.”

And said he hoped the levy could be brought in earlier than the 2026 date quoted by ministers. "The government can fast track bills when they choose to do so,” he said. And he suggested the government might take into account “extensive consultation the city has done already” on the tourist tax.

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