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Tourist Tax, Visitor Levy or Bed Tax

Like most tourism businesses in Scotland the Association of Scotland’s Self-Caterers does not support a tourist tax, visitor levy or bed tax.

  • Scotland is already expensive to visit.   The World Economic Forum ranks the UK 140th out of 141 counties in terms of tourism price-competitiveness.
  • A tourist tax would be contrary to the National Tourism Strategy as it would make us less competitive, working against efforts to increase visitor numbers and revenues.   It would jeopardise the significant contribution that tourism makes to the Scottish economy through tourism-related employment and visitor spend.
  • A bed tax would penalise accommodation providers in a sector which benefits many other businesses, attractions, restaurants, pubs along with the cultural and events sector.
  • Recent analysis by BHA shows that, of fourteen European countries which apply some form of tourist tax, all but one levy reduced rates of VAT on hotel services.   In fact, the UK is one of only three EU countries that do not have a reduced rate of VAT for tourism services.
  • The Scottish Government declared earlier in the year that there are no plans to implement any new taxes on the tourism sector which it says is currently subject to the second highest VAT rates in Europe.   It has said that it believes there are no existing legal powers for local authorities to levy a local bed tax or tourism tax.
  • The Scottish Tourism Alliance, British Hospitality Association and tourism members of the Federation of Small Businesses have also expressed their strong opposition to calls for tourist taxes.

The ASSC thinks this needs watching closely.  

  • There have been several calls to investigate the possible introduction of a tourist tax from politicians in the previous parliament, and certainly Councils, notably Edinburgh have been looking at this.
  • The 2017 budget will be an enormous challenge, particularly for Councils, increasing the pressure to raise income.   There are Council elections in May 2017.
  • It may be possible for Councils to agree a legal mechanism in City Deal negotiations being agreed at Westminster and Holyrood.
  • The general public seem to understand and may well support a tourist tax.   Many may have paid a small amount when on their own holidays to other destinations.
  • The Government is coming under pressure to review local taxation as well as business rates, so we consider the position to be more fluid and in the balance than might appear.

We do not welcome a Tourist Tax.  

Should a Tourism Tax be introduced however ….

We need to know:

  • The proposed level of tax and from which sectors?
  • Who collects this? Is there in fact a legal mechanism?  How much will it cost to collect?
  • Will the money collected be ring-fenced by local authority, by city/town or does it disappear into general taxation?
  • Where is it spent? Who decides how it is spent?
  • If a tourism tax is introduced, we consider that several sectors should share in contribution.   It should not be a solely a bed tax, which will penalise overnight visitors while letting day visitors off the hook.

December 2016

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