The SLTA (Scottish Licensed Trade Association) has expressed concern that the 5% visitor levy proposed by the City of Edinburgh Council will do nothing to support accommodation providers.
Colin Wilkinson, managing director at the SLTA, warned that the levy imposed, which will also attract 20% VAT, will be on top of the 20% VAT that visitors already have to pay when booking accommodation in Scotland. “The comparison that many European countries have some kind of visitor levy is often used,” he said. “However, our European neighbours do not charge 20% VAT on accommodation – so here it is effectively a ‘tax on a tax on a tax’.
The Visitor Levy (Scotland) Bill was backed by MSPs earlier this year, giving councils a new power to introduce a visitor levy that would raise funding for local visitor facilities and services. Edinburgh will be the first to launch a city-wide levy.
But Mr Wilkinson pointed out that many business operators in the tourism sector are concerned that the income from the levy may not be used for its intended purposes and how is the sector going to ensure this “extra” income will not just be swallowed up into the council’s budget to replace any future cuts.
He said: “We have no issue with money from the scheme being used to reinvest in the city’s infrastructure and sustainable tourism – but why should accommodation provider businesses be asked to contribute funds towards affordable housing? That seems unfair.
“It’s important to remember that it is not just accommodation providers that benefit from tourism – many other sectors also benefit – but it is the hard-pressed accommodation sector that is being targeted with administering this tax, another cost to business.
“We are also hearing that some local councillors in other areas are suggesting imposing a visitor levy of up to 12.5% which is hugely concerning. Government ministers can intervene if excessive visitor levies are imposed, but what will exactly trigger that intervention?
“These levies must be set at a reasonable level at a time when businesses are under inflationary and other pressures including the ongoing cost-of-living crisis.”
Mr Wilkinson added: “Even with a consultation process and the formation of local forums to decide on the level of a visitor levy, if one is to be introduced will businesses’ concerns be truly taken into consideration?
“When budgeting a holiday any additional charges for visitor accommodation could well mean less spend in other business sectors.”