South Ayrshire Tourist Tax put on the back burner for two years

Daily Record

16 hours ago

The upfront costs, a lack of definitive 'cash benefit', and industry opposition led to councillors agreeing to pause the project for at least a couple of years.
A new South Ayrshire tourist tax has been put on the back burner.
But tourism spokesperson, Councillor Alec Clark, believes that despite the nature of the tax offered by the Scottish Government, a visitor levy was inevitable.
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South Ayrshire Council's Cabinet heard that a visitor levy of between one and five per cent would bring in between £400k and £2m a year at most.
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However, significant upfront costs, a lack of definite cash benefits and the opposition of major tourism groups, led to officials recommending a two year pause.
Assistant Director of Communities, George Hunter, told the Cabinet on Wednesday: 'Officers have been considering the pros and cons of a visitor levy, including an open consultation that ran for the best part of three months.'
He said that the Scottish Tourism Alliance, which is the industry body for tourism, had raised concerns about potential impact on Scotland's competitiveness as a tourism destination.
The Federation of Small Businesses also raised concerns about the impact and small accommodation providers who may struggle with the administrative burden of collecting the levy.
He continued: 'The FSB have also expressed concerns, supported by engagement with local accommodation providers about the potential negative impact on the local economy.
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A similar position was taken by The Association of Scottish Self-Caterists who said that, given the current challenging economic climate, the levy would be an additional burden on their members.
The project has been part of the council's transformation programme.
Mr Hunter said that officers on the transformation board had looked at the survey feedback and had recommended a pause that would allow them to monitor the impact in other areas which had already agreed to go ahead with a levy.
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Councillor Clark said: 'I agree with the outcome and I agree that it has to be reviewed in August 2027.
'I do believe, eventually, we will have a tourist levy. The problem this particular time is that it was complex.
'It was from the very beginning. The Scottish Government decided to make it a percentage levy, whereas anywhere else has a flat rate.
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'That complicated things from the start, because it was a percentage not necessarily of a whole hotel. You have to break that down.
'That causes administration costs right away. It is obviously taken up by the City of Edinburgh and Glasgow, because they themselves have the amount of tourism to justify it, and it'll be interesting to see how Argyll and Bute Council go along with this.
'I think that the problem with the survey is that if you had surveyed the nation or a town to say if they would like to a tax rise, the answer is going to come back 'No', it's a negative.
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'So we go anywhere in Europe, travel anywhere else in the world, and you pay a visitor levy.
'And that visitor levy goes towards making improvements to the tourism offer, and indeed to the suburbs.
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'The problem here is the way that the rest of levy is constructed to be distributed is complicated.
'It's not just a certain manner of distribution that South Ayrshire can turn and say, okay, we bring in £200k and we will use that £200k for x, y and z.
'I think it goes through, though I stand to be corrected, a different type of board who than decide what the priorities are, and it's not necessarily what way we decide.
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'So, overall, I do agree with what we're doing. I support the paper. But, I do think in the end, when the review comes, it may be looked at in a different manner.
'I would hope that the process coming out the Scottish Government is more straightforward.'
Following a query from Councillor Hugh Hunter on the specific reason to remove the levy project from the transformation portfolio, Assistant Director of Transformation, Louise Reid, pointed out that the guidance from Audit Scotland requires the work of the board to deliver 'cashable benefits.'
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She said: 'As yet, we've been unable to clearly identify what the cashable benefits would be from the introduction of a visitor levy, given the set-up costs that involved developing the new technology, implementing systems and processes.
'There's also a resource requirement up front that would be required. Now, given that there's an also an 18 month consultation that's statutory in place, those costs would be over a number of financial years until we're actually able to generate any benefits from it.
'So, given the focus of the transformation program is on projects that are going to support the council's budget deficit and financial sustainability, that's the recommendation that it should move to this point.'
Cabinet agreed to pause the visitor levy programme until August 2027.