Visitor Levy in Scotland delayed until 2026 at the earliest – Harpers Wine & Spirit Trade News

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By James Bayley

Published:  30 May, 2024

Leon Thompson, executive director of UKHospitality Scotland, said: “This is a significant moment for Scotland’s hospitality and tourism sector. The support for the enabling legislation by MSPs ends a long-running debate. We are pleased that MSPs agreed to our members’ request for an 18-month preparation period after a council decides to introduce a levy, ensuring that no levy will be in place anywhere in Scotland until 2026 at the earliest. This period allows adequate time for councils and businesses to prepare.”

The legislation mandates that funds raised from the visitor levy be used to enhance facilities for both leisure and business visitors. It also establishes local Levy Forums to discuss fund allocation. However, Thompson also highlighted the potential financial impact on visitors and businesses, warning that additional costs could make Scotland less competitive. He stressed that accommodation providers will incur significant costs in preparing IT and administrative systems to handle the levy and called for councils to compensate these businesses for their expenses.

“Charges will add additional cost to holidays for international and domestic visitors. This will add to the competitive disadvantage Scotland currently faces. Over and above cost considerations, if handled badly, levies will have consequences for the reputation of brand Scotland. I urge councils to listen to the voice of business when considering the introduction of a levy,” said Thompson.

“Whilst the charge will be for visitors to pay, accommodation providers will face considerable costs in preparing IT and administration systems to handle charging and taking receipt of levy payments,” he added.

Meanwhile, the Scottish Licensed Trade Association (SLTA) has expressed opposition to the visitor levy, with MD Colin Wilkinson urging the government to acknowledge it as a tax. The SLTA is concerned that the additional revenue may not be used for its intended purposes and that it could add to the competitive disadvantage Scotland faces due to the existing 20% VAT on accommodation.

Wilkinson pointed out that while 21 European countries have some form of visitor levy, they do not charge such high VAT on accommodation. 

“Tom Arthur, the employment and investment minister, points out that ‘21 European countries have some kind of visitor levy’. However, he conveniently fails to mention that our European neighbours do not charge 20% VAT on accommodation. Now our visitors requiring accommodation, both foreign and domestic, will have a further tax added on to their accommodation bills and, to add insult to injury, VAT will also be added on to the visitor levy, so it’s a ‘tax on a tax’,” Wilkinson said.

He also stressed the need for flexibility in the new legislation and for the licensed hospitality sector to be involved in discussions with local councils.