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ASSC Response to Local Government, Planning and Housing Committee Call for Views on Visitor Levy (Scotland) Bill

The ASSC has responded to the Scottish Government’s consultation into a Visitor Levy:


The ASSC welcomes the opportunity to respond to the Local Government, Planning and Housing Committee call for views on the Scottish Government’s Visitor Levy Bill. The ASSC believes in the responsible and sustainable growth of Scotland’s tourism sector and that all levels of government should look to maximise the opportunities arising from one of Scotland’s most important industries, rather than creating additional barriers through taxation or levies. Therefore, the ASSC does not believe that the Scottish Government should proceed with the introduction of a visitor levy. It would make our tourism industry less competitive and push up the cost of holidaying in Scotland for ordinary families. The recovery of Scottish tourism, both in respect of Covid-19 and the cost-of-living crisis, remains precarious. The Scottish Tourism Alliance’s industry survey of May and June 2023 highlighted the “majority of Scottish tourism and hospitality sector [is] financially fragile and still in survival mode.” Furthermore, it also comes at the very worst time for the self-catering industry due to the increased regulatory burden of short-term let licensing and planning legislation. Our latest survey shows two-thirds of operators are actively considering closing their doors to guests.

One factor often overlooked is that existing taxes on the tourism accommodation sector in Scotland are higher compared to other countries, including those countries with tourism levies. For example, the UK applies a standard rate of 20% VAT to accommodation, and this is amongst the highest in Europe. A new visitor levy in Scotland would be in addition to VAT, whereas in 25 EU countries a discounted VAT is applied. This would clearly further disadvantage Scotland compared to competitor visitor destinations.

Moreover, it should not be forgotten that tourists already make a significant economic contribution to the Scottish economy (and self-catering operators pay business rates/council tax), thereby generating wealth that helps to enable infrastructure spend. For instance, official statistics (pre-pandemic) from the Scottish Government show that tourism contributes approximately £6bn to the Scottish economy, 5% of the total, employing around 207,000 people. Almost £4.8bn was spent by overnight visitors to Scotland, benefiting local businesses and communities in the process. Such facts are often lost in the general conversations surrounding the introduction of a visitor levy.

We do not believe this Bill should be taken forward by the Scottish Government. However, due to the firm commitment to legislate, and in the spirit of constructive (and hopefully meaningful) engagement, our preference would be that the design of any levy should clearly be set out at a national level with some local discretion. This would ensure that there is an appropriate balance and fairness between those local authorities who wish to introduce a levy in their area and local councils should be allowed to attribute the levy for specific purposes most appropriate to their area. In addition, the charging model must be simpler than what is proposed and include a maximum cap. While not every local authority will wish to take forward this measure, having a number of different schemes across Scotland would add complexity and bureaucracy – the last thing our sector needs is 32 different levy schemes just as we have seen 32 different short-term let licensing schemes.


What are your views on whether local authorities should have a power to place a levy (a type of additional charge or fee) on top of the price charged for overnight accommodation in their area? 

As stated, the ASSC does not believe that the Scottish Government should progress with the Visitor Levy Bill. However, if the government are adamant that local authorities should have the power to introduce a local visitor levy, then genuine and meaningful engagement between industry and local and national government is absolutely paramount. We cannot replicate the experience regarding short-term let licensing – where industry concerns were ignored or dismissed by Ministers and officials – but ensure businesses have a key and integral role in shaping its development. The work of the Visitor Levy Expert Group in the context of the New Deal for Business presents us with an opportunity to get this right in the first instance rather than dealing with issues further down the line.

We remain concerned that any levy will be viewed by cash-strapped local authorities as a means to generate extra revenue. Accommodation providers should not shoulder the responsibility for set-up costs of collecting any levy on behalf of local authorities. It is imperative that monies raised from the levy are reinvested in tourism related services and not for general spend.

Given that the Bill is likely to result in different councils introducing a visitor levy in different ways or not doing so at all, what impact do you think the Bill will have in your area and across different parts of Scotland? For example, this could include any impact (positive or negative) on local authority finances, local accountability and flexibility, businesses, or on numbers of overnight visitors.

With different councils introducing different visitor levies, this will add complexity and bureaucracy to the system. There is a considerable risk, particularly during a cost-of-living crisis, that domestic visitors from either other parts of Scotland or the rest of the UK, may avoid a locality if a visitor levy has to be paid in addition to the usual holiday budget. A visitor may therefore prefer holidaying in York or the Lake District – where there are no visitor levies – than say Edinburgh or the Highlands who could introduce a charge.

There is also an impact on international visitors. It is frequently asserted that many other countries have successfully implemented tourist taxes or levies but Scotland and the UK are already less competitive in terms of other fiscal measures. Visitors are ultimately taxed less, meaning they can spend and stay longer in these destinations. A levy risks pushing Scotland down the table of popular destinations regarding price competitiveness and global appeal.

Do you agree with the Bill’s definitions of a “chargeable transaction” and of “overnight accommodation”? If not, what definitions do you think would be better? 

We agree with the Bill’s definition of a “chargeable transaction” but have serious concerns about “overnight accommodation.” Specifically, the decision to exempt wild camping and moveable campervans from the levy will result in an uneven playing field between different types of accommodation provider. This is unjust, particularly as many communities are concerned at the impact of wild camping and motor accommodation in debates around ‘overtourism’, especially in the Highlands and Islands. In fact, it is often argued that a tourist levy is required to deal with the very effects of wild camping and motorhomes, be pressure on road infrastructure, litter and waste management. Their exclusion from the Bill seems ironic and perverse. Another inequity is the decision not to include cruise ships within the Bill. The Scottish Government say this would have delayed the legislation, but we do not believe that is a justifiable excuse.

What are your views on the Bill’s proposal to allow councils to set the levy as a percentage of the chargeable transaction? Are there any other arrangements that you think might be better? If so, please give examples and a short description of the reasons why. 

The ASSC opposes the proposal to allow a percentage charging model as this will be complex and cumbersome for small and micro-businesses – these are precisely the sort of businesses who make up Scotland’s self-catering sector. These businesses may not have IT systems or utilise accountants, rendering them more likely to be subject to mistakes and enforcement action.

We would recommend a national levy charging model with a consistent fee structure to reduce complexity and confusion, with any monies raised being ringfenced to support tourism related spend. A fixed flat-fee charge per night would appear to be the best option for small and microbusinesses. However, whatever model the Scottish Government choose to take forward, there must be a nationally agreed cap charge per stay inserted in the Bill.

More broadly, the ASSC would also encourage policymakers to take cognisance of the five areas of good practice provided by the European Tourism Association on tourist taxes, namely: competitiveness, reciprocity and transparency, notice, consultation and payment process.

  • Competitiveness: Tax is inflationary and destinations need to be aware of the cumulative effect of local taxes on competitiveness;
  • Reciprocity & Transparency: Revenue should be allocated to services and infrastructure that visitors as well as locals may use and all should be able to see the benefit;
  • Notice: There should be sufficient notice of any change (especially if above inflation), preferably 18-24 months, given industry’s product budget cycle;
  • Consultation: Consultation should be sufficiently wide and carried out with real intent to find a solution that addresses the stated problem; and
  • Payment process: Tax should be easy to pay, collect and remit by visitors and commercial accommodation providers, and be cost effective to administer.

What are your views on the absence of an upper limit to the percentage rate (which would be for councils to decide) and that it could be different for different purposes or different areas within the local authority area, but not for different types of accommodation? 

If the Visitor Levy Bill proposals are taken forward, the ASSC believes there ought to be a nationally agreed upper limit that can be charged by local councils and that visitors should not be charged beyond 7 nights staying in the same accommodation. Families are already experiencing considerable cost pressures which will impact their ability to holiday in Scotland – thus, any visitor levy must be set at a fair and realistic level, otherwise Scotland is going to become less competitive and attractive as a destination.

The Bill would allow councils to apply local exemptions and rebates to some types of guests if they choose to.  It also allows the Scottish Government to set exemptions and rebates on a national basis where it considers it appropriate. What are your views on the Bill’s proposals in relation to exemptions and rebates? 

The Scottish Government need to provide more detail about the “issuing of exemption vouchers” as the Bill remains imprecise and vague. It cannot be left to later guidance – our experience with short-term let licensing and planning guidance bears this out. Instead, we would support the creation of a nationally agreed set of exemptions which should be kept as simple as possible for accommodation providers and visitors.

Do you agree with the Bill’s requirements around the introduction and administration of a visitor levy scheme, including those relating to consultation, content, and publicity (Sections 11 to 15)? Are there any other requirements you think should be met before any introduction of the levy in a given area? 

Consultation with affected stakeholders is imperative but this must be meaningful and not an au fait accompli. Any consultation exercise should be extensive and in-depth as possible given the impact on business, as well as a condition for a minimum requirement on the level of engagement that must be carried out. If any levy is agreed to, businesses need adequate time to prepare and we would recommend a period of at least 18 months after the date of a local council’s decision to introduce the levy. While some councils may claim they have already undertaken substantial consultation, this occurred in a completely different context prior to Covid-19 and the cost-of-living crisis, so a new comprehensive consultation will be required. Finally, the Visitor Levy Expert Group must be given sufficient time to develop the visitor levy guidance for local councils to avoid the sort of inconsistencies, confusion and unintended consequences we have witnessed with short-term let licensing.

 What are your views on the Bill’s requirements for local authorities in respect of records keeping, reporting, and reviewing? (Sections 16, 18 and 19) 

Accountability in this area is absolutely vital. Local authorities must keep a separate account of the visitor levy scheme, report on the monies raised and how the net proceeds have been spent if businesses are to have any confidence in the levy. Councils should not use the levy as a revenue raiser for existing council services, only for those which are directly linked to tourism. We agree with the three-year review period and reporting as it is important to assess the impact of the scheme on the tourism sector but a national approach on monitoring should be set out in the Bill.

The Bill requires that net proceeds of the scheme should only be used to “achieve the scheme’s objectives” and for “developing, supporting, and sustaining facilities and services which are substantially for or used by persons visiting the area of the local authority for leisure purposes.” Do you agree with how the Bill proposes net proceeds should be used and if not, how do you think net proceeds should be used? 

The ASSC welcomes the commitment contained in the Bill stipulating that the net revenue raised from the levy must be used for services that are for/used by those visiting the locality for leisure purposes. The visitor levy should not be used as a means of taxing businesses to fund services which should come from existing budgets.

The principles of reciprocity and transparency are key. In terms of good practice seen elsewhere in Europe, the ASSC would highlight the examples of good practice from Spain and Switzerland. The Balearic Islands have published a website which details the projects funded by the ‘eco-tax’. To date, the tourism tax in Barcelona has subsidised 89 local projects related to tourism. In Switzerland, where overnight visitors who pay the Kurtaxe/Taxe de Séjour, in many destinations visitors will receive a guest card entitling them to free public transport during the stay. In destinations such as Basel and Lucerne, the benefit is extended to include free Wi-Fi access at hotspots and discounted entry to visitor attractions. Furthermore, in Bled and Zermatt, both highlight how the tax revenue is used for specific projects.

 What are your views on the Bill’s requirements for accommodation providers to identify the chargeable part of their overnight rates, keep records, make returns, and make payments to relevant local authorities? Are there any other arrangements that you think would be better, for example, by reducing any “administrative burden” for accommodation providers? 

As per earlier comments, the percentage model in the Bill will be onerous and burdensome for the small and microbusinesses that make up self-catering and Scottish tourism more generally. A fixed flat rate charge would be much preferable.

The requirements for record keeping and returns in the Bill would be another bureaucratic burden on small tourism accommodation providers, especially those in self-catering who are having to navigate the costly short-term let licensing scheme. This could be eased by: (a) enabling accommodation providers to submit returns bi-annually rather than on a quarterly basis; and (b) allowing businesses to keep records for each three-year cycle rather than five-year period.

Do you have any comments on Part 5 of the Bill (Enforcement and Penalties and Appeals)? Are there any other arrangements that you think might be more appropriate in ensuring compliance and reducing the risk of avoidance? 

The enforcement, inspection penalty powers are too severe and it runs the risk of having local councils taking a draconian approach to businesses who would be acclimatising to the new levy. At a time when local authority budgets are stretched, we would question whether councils would actually have the ability to utilise these powers. The Bill ought to be expressing the means by which local councils could support and assist businesses to comply, not policing and penalising them.

Do you have any comments on the issues that the Scottish Government proposes to deal with in regulations after the Bill has been passed? (Set out in the Delegated Powers Memorandum) Are there any that you think should be included in the Bill itself rather than being dealt with by regulations and if so, why?

As stated, the ASSC would prefer a national model if the Bill is progressed to ensure a consistency of approach. Nonetheless, we welcome powers for Scottish Ministers to: (a) add/remove/amend types of accommodation liable for the levy without the need for primary legislation; (b) the power to create a national list of exemptions where it is not appropriate to pay a visitor levy; (c) the power to make further provision about the way local councils publicise the introduction of a levy; and (d) the power to introduce national requirements on administration, reporting and reviewing of a levy.

Do you have any comments on the accuracy of the estimated costs for the Scottish Government, local authorities, accommodation providers and others as set out in the Financial Memorandum and Business and Regulatory Impact Assessment (BRIA)?  

The resourcing implications for small accommodation providers could be significant. This is recognised by both the Financial Memorandum as well as the BRIA. The former states that “the collection of new data and new record-keeping may be a more significant burden to smaller hotels, self-caterers or B&Bs.” The latter notes: “there is potential that some smaller accommodation providers (particularly in the self-catering sector and providers offering accommodation through collaborative sharing platforms) could exit the sector if administration and compliance costs associated with the levy are perceived as significant.”

For accommodation providers who have been impacted by a multitude of factors, from the pandemic, rising energy bills, the cost-of-living crisis, and introduction of short-term let licensing, for many this could be the tipping point towards closure. The financial implications of the visitor levy must be viewed alongside these pressures. Moreover, the ASSC are concerned at the level of engagement undertaken by the Scottish Government with affected businesses which inform the costs set out in both documents.

Finally, although the Financial Memorandum and BRIA acknowledge the remaining uncertainty around VAT, commercial rates, etc it fails to estimate the potential cost implications of this for business. The visitor levy should be VAT exempt – if this does not happen, the Scottish Government must have contingencies in place to assist businesses. Disturbingly, the Financial Memorandum does estimate the financial impact on businesses if VAT is applied to the levy – this needs to be urgently revisited.


The ASSC continue to maintain that a visitor levy will entail negative consequences our members and the tourism sector as a whole and we oppose any form of additional charge on visitors. A levy will add cost and complexity to sector that already runs on tight margins and the responsibility of collection generally falls on commercial accommodation.

Indeed, the visitor levy plans from the Scottish Government arrive at a time as our sector is already being hit with a never-ending juggernaut of regulation when the government and industry should instead be working together to reduce the burden on small businesses to support a sustainable and prosperous future for Scottish tourism. Businesses have endured a global pandemic and are now being squeezed by a cost-of-living crisis. These proposals may add more risk and uncertainty to a sector where the domestic market makes up 70% of those holidaying in Scotland.

Our message to policymakers scrutinising the Bill is simple: if you chose to do this, do it right. During challenging times, Scottish businesses simply cannot afford a repeat of the unintended consequences that have unfolded with the onerous short-term let licensing scheme.




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