Holyrood Committee Backs Visitor Levy Bill at Stage 1

The majority of members on the Holyrood Committee considering the Visitor Levy (Scotland) Bill have supported the general principles behind the legislation, which would allow Scottish local authorities to introduce an overnight accommodation levy, following extensive consultation.

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Publishing its Stage 1 Report today, the Parliament’s Local Government, Housing and Planning Committee said that a majority of members of the Committee support the general principles of the Bill and a majority of members again found that it was “unlikely that the introduction of a levy in certain local authority areas, assuming a relatively modest rate, would have a deterrent effect on visitor numbers and therefore on the visitor economy in Scotland.”

Miles Briggs and Pam Gosal did not support several of the report’s conclusions or the general principles behind the Bill.

A majority of members however agreed with evidence from stakeholders which suggested the introduction of a levy has “the potential to bring significant benefits to visitors, the tourism sector and local residents” whilst recognising that not all of Scotland’s local authorities are expected to introduce a levy and therefore benefit directly from the Bill.

Supporting the Bill’s provision to give local authorities the ability to choose whether to introduce a levy and how to apply it locally, a majority of members of the Committee welcome “the degree of flexibility” provided and believe that this will allow councils to “design and implement it in a way that suits local circumstances.”

The Committee also recognised business concerns around the timing of the legislation, following the impact of COVID-19 on Scotland’s tourism sector and the increased costs of doing business, as well as recent changes to short-term lets licensing.

The Report also said the Committee was “mindful of the concerns of accommodation providers that the introduction of a levy could result in an additional administrative burden” and welcomed the Bill’s requirements to implement localised monitoring and reporting to ensure transparency and accountability.

Considering if any levy should be a flat or percentage rate, the Committee considered this was “perhaps the most difficult aspect of the Bill in terms of determining what the right approach should be.” and invited the Scottish Government to undertake further work on this area of the Bill to find a suitable solution.

The earliest date a visitor levy could be applied by local authorities is 2026, which a majority of members of the Committee considered would provide enough time for any “outstanding issues to be resolved through engagement and consultation” with businesses and other key stakeholders. However, the Committee also invited the Scottish Government to respond to suggestions from some councils that they should be able to introduce a levy sooner than 2026.

Commenting, Committee Convener, Ariane Burgess MSP said:“In supporting the Visitor Levy Bill at Stage 1, a majority of the members of the Committee recognise its potential to positively impact Scotland’s tourism sector.

“After thorough consultation and consideration, most members of the Committee have supported the core principles of the legislation, emphasising that a well-designed levy, at a modest rate, shouldn’t discourage visitors and should bring benefits for the tourism sector.

“A majority of the members of the Committee welcomed and support the flexibility provided by the Bill, which will enable local authorities to customise the levy’s implementation meaning that local levies are designed to suit local circumstances.

“Understanding concerns from businesses and being mindful of possible administrative burdens, a majority of members of the Committee believe that industry worries can be resolved through constructive engagement and consultation at the local level, ahead of any levy being introduced in 2026.

“For the majority of the members of the Committee the Visitor Levy Bill has the potential to be a positive force for the tourism sector, and thank the individuals, organisations and other stakeholders who provided evidence to inform this report .”

UKHospitality Scotland Executive Director Leon Thompson said: “The introduction of the Visitor Levy will represent a huge change for both hospitality, leisure and tourism businesses, as well as local authorities, so it is essential that the Scottish Parliament properly scrutinises the legislation.

“Given the scale of change this tax will bring, to businesses and customers, it’s very concerning that the Local Government, Planning and Housing Committee has today concluded that the 18-month period set aside for businesses to prepare could be reduced to 12-months. That is simply not long enough. Accommodation providers will need maximum time to prepare their systems, teams and customers for this change.

“The Visitor Levy will come with significant costs to businesses implementing new, or upgrading existing IT and payment systems, as well as identifying dedicated human resource to manage the charge. There is also the issue of businesses paying commission on bookings and credit card transactions. As things stand these are to be borne by businesses, whilst councils look to recover their costs. The legislation must provide for businesses to recoup expenses associated with administering the scheme, on behalf of local authorities.

“Furthermore, the report pushes expectation to resolve outstanding issues onto the Expert Working Group and the guidance that will be created. This is not good enough, as the guidance will not be statutory, leading to a variety of approaches in implementing this tax in different parts of the country.

“It appears that business-critical issues raised during the consultation and at the Committee’s evidence sessions are being swept under the carpet. If we are to learn lessons from previous failed initiatives, like the Deposit Return Scheme, all these issues must be resolved in legislation. That is the only way to provide certainty to businesses.”