Achi news desk-
Based on Visit Scotland estimates in 2023, Scottish residents accounted for 25% of nights spent in holiday accommodation, meaning that, given average room costs, up to £35m would be out of pocket the Scots if councils committed to it.
The Scottish Bed and Breakfast Association which has been tracking the progress of the levy has raised concerns about a lack of understanding of how the tax would hit Scots.
He fears that the tax will seriously damage the nation’s economy because it will have to be paid on top of VAT of 20% and what he called “very high alcohol, flight departure taxes and business taxes”.
They are appealing to local authorities to boycott the tax for visitors and Scots “as it will of course stop travel and tourism in Scotland and lose the vital competitiveness of our tourism industry against Europe and even England.”
Edinburgh, Highland and Aberdeen were among councils that supported the idea of a tourism tax six years ago.
(Image: Newsquest)
The majority of respondents to a recent tourism tax survey in the Scottish capital opted for a levy of up to £5 on a £100 room (5%).
Modeling analysis by Edinburgh council estimated that a 7% tax would generate £35m. The council has since said the proposed visitor levy could help the city raise around £25m of extra money for services and to subsidize tourism infrastructure – estimated to be around 5%.
An analysis by the council states that the levy “would be less than other European cities even at 5%).
In August 2019, Highland Council calculated that it could generate as much as £10m a year from levy, and reinvest the money to improve infrastructure such as roads, car parks and public toilets.
Members of the UK Parliament passed the Visitor Levy (Scotland) Bill last month and will allow local authorities to add a charge to overnight accommodation such as hotels, bed and breakfasts and holiday accommodation.
Many European countries, including parts of Germany and Spain, already have levies.
Manchester introduced its City Visitor Charge last April to pay for measures aimed at attracting more visitors.
Its fee of £1 per room, per night, is estimated to have raised around £2.8m in its first year.
When it was first proposed by the Scottish Government last year they said the money raised could be used to help attract more visitors to Scotland.
Public finance minister Tom Arthur insisted that the charge would be “less than the price of a cup of coffee” for many visitors, adding: “It’s a common practice all over the world. Many, many large cities across Europe have had this for many years.”
The levy would be a percentage of the cost of overnight accommodation – deducting any commission the provider pays to any online booking service and such room “extras” and food and drink.
So if there was a levy of 5% on £100 for a room it would result in tourism tax of £5.
Accommodation providers would be responsible for collecting the charge and transferring the money to their local authority.
Each local authority will ultimately decide whether to introduce the tax and how much it will be but there is no upper limit.
According to a consultation by the Scottish Government, around 17 of Scotland’s 32 councils, together with the body representing local authorities Cosla, support the introduction of the tax.
The first tax could be introduced in 2026 and Edinburgh City Council is expected to be the first city to put it in place.
David Weston, chairman of the SBBA said that all 32 councils in Scotland would not have to introduce the tax to come close to the £142m that would be raised if a 5% levy were allowed introduced as some, for example Edinburgh and the Highlands, have an enormous amount. a disproportionate share of overnight visitors.
The SBBA says the amount raised by a 5% levy from Scots if it came in across the country would be 25% more than if the higher rate of income tax rose by 1p.
“So what is labeled as a visitor levy may be seen by the people of Scotland more like a stealth tax on them. That is a significant new tax, and we don’t feel there is enough debate informed public has been about it yet. a very high risk new tax and the public needs to be fully aware of it and behind it to be sustainable.
“The thousands of small businesses that provide accommodation across Scotland – bed and breakfasts, guest houses, hotels and self-catering businesses – are worried about the effects of the levy,” said Mr Weston.
“Scotland is already starting to have a perception of being expensive. Our VAT on accommodation is 20% compared to 10% in France, and we already have among the highest taxes on alcoholic drinks, flights and business premises.
“There are already signs that our domestic tourism is failing as external tourism is growing strongly in contrast. If an additional tax is added on top of that, we fear that Scotland will suffer serious damage to its tourism sector, which is vital to the Scottish economy.
“And small accommodation providers – often micro businesses such as Bed and Breakfast – will bear the burden by having to add the levy to our prices – thereby losing sales – and by having the whole burden of collecting it.
“But of course this won’t just hit accommodation owners – the so-called visitor levy is actually accommodation tax, of which £1 in £4 will be paid by the people of Scotland.”
A spokesman for the Scottish Government said: “The Scottish Government does not recognize this figure. It is up to individual councils to decide whether they want to introduce a visitor levy and at what rate. They can only do this after the required consultation with local businesses, communities and tourism organizations and an assessment of the impact of introducing such a levy.”
Cosla has supported the tax, drawing attention to the fact that the cost of maintaining the local environment and public services, which attract tourists, “falls heavily on the country’s purse”.
“Sustaining this is at significant risk without new ways of investing. While recognizing the cultural and economic benefits of tourism, the local citizen pays the cost of tourism. There is a case for sharing this more widely,” he said in a briefing.
“The tax could be collected as a percentage of accommodation, or as a flat rate. It could also be progressive depending on the accommodation star rating. It need not be limited to accommodation, the tax could be collected as infrastructure use but most importantly , be relevant to local circumstances.”
