Edinburgh tourist tax: How would it work?

EDINBURGH has won its battle for the right to introduce a tourist tax thanks to a budget deal between the SNP and the Greens at Holyrood.

Friday, 1st February 2019, 11:56 am
Updated Friday, 1st February 2019, 12:00 pm
Edinburgh is to set the UK's first tourist levy.
Edinburgh is to set the UK's first tourist levy.

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Edinburgh will be first city in UK to get tourist tax

It means local councils will be given the power to bring in a visitor levy if they choose. A formal consultation on the move will take place this year before the necessary legislation is brought forward.

Here, we take a look at how it would work and how the money would be raised.

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Q: Who would pay Edinburgh’s new tourist tax?

A: It would be a tax on visitors staying in any paid-for accommodation – hotels, B&Bs, hostels and short-term lets – but excluding campsites.

Q: When would it come into force?

A: It’s not clear how soon the new tax could be implemented. The Scottish Government has said it will carry out a formal consultation this year before introducing legislation at Holyrood. But that could take up to a year to be passed and then the council would have to prepare the detailed scheme, so it could be a while yet.

Q: How much would the levy be?

A: The city council has proposed a flat-rate £2 per room per night, rather than a percentage or per person charge. It will be applied at the same rate all the year round, but will be capped at seven consecutive nights.

Q: How much would the tax raise?

A: The council has estimated the proposed £2 a night per room charge would bring in total revenue of £14.6 million a year. Previous estimates of £11m were based on a 2 per cent levy.

Q: Will all the money raised remain in Edinburgh?

A: Concerns have been raised that part of the revenue might have to go into a central pot or that the council could find its core funding cut in future years, but it is expected that all the money raised by the new tax would be kept by Edinburgh and would be additional to the city’s existing funding.

Q: What would the money be used for?

A: The idea is the levy would pay for some of the extra costs the city has to meet because of the key part tourism plays in the Capital’s economy. That might mean money is put into festivals or promoting the city or improving areas where tourists visit, but it might also mean using it to cope with the extra waste generated by visitors or repair the roads they drive on.

Q: Is there public support for the new tax?

A: The council carried out a consultation in which more than 2560 people took part – either answering a survey or attending public discussion forums. It found 91 per cent of residents, 77 per cent of businesses, 67 per cent of tourist attractions and 51 per cent of accommodation providers backed the council’s scheme.

Q: What does the tourism industry say?

A: The council claims many local tourist businesses support it. But industry bodies argue the levy would mean tourists faced higher taxes here than most other European cities and so fewer visitors would come to Edinburgh and the economy would suffer.