Scottish tourism chiefs demand changes to visitor levy

The Herald Scotland

28-05-2025

The letter, which has been co-ordinated by the Scottish Tourism Alliance, warns of the risk of Scotland following a different path to the rest of the UK, arguing that the policy is 'putting the sector at a competitive disadvantage and causing considerable complexity and unnecessary cost to businesses'.
The intervention comes as Edinburgh looks set to become the first local authority in Scotland to introduce a tourist tax. Edinburgh council chiefs say the levy, which will come into effect in July 2026, will help the city to retain its standing as a leading international tourism destination by raising revenue to reinvest in local services.
The Edinburgh tourism tax, which will see a 5% fee applied to the cost of an overnight stay in the Scottish capital, is being introduced in response growing concern over the impact of high levels of tourism traffic in key tourism areas. Glasgow has been consulting on plans to introduce a visitor levy in the city and a similar measure is also gaining favour in Orkney.
However, the prospect of imposing an extra charge on tourists, as well as the burden of its administration on individual businesses, has caused deep disquiet among tourism and hospitality operators, many of which are struggling under a barrage of rising costs.
The letter states: 'We share the Scottish Government's ambitions to build a stronger economy and to make Scotland a world-leading visitor destination but are frustrated and very concerned that the visitor levy in its current form risks undermining that success.
'Taking a different approach to the rest of the UK on this policy is putting the sector at a competitive disadvantage and causing considerable complexity and unnecessary cost to businesses. Unfortunately, it is another example of a well-intentioned policy being badly implemented.
'The STA will continue to gather the views of the industry and local authorities across all parts of Scotland to make the strongest and clearest case to the Scottish Government that it is essential to fix the legislation in its current form, which risks doing more damage than good for the sector and the wider Scottish economy.'
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The letter notes that the industry had come together to develop proposals to 'strengthen the levy framework', in response to an invitation from the Scottish Government and acknowledging the wish expressed by the First Minister to ensure the levy is as 'simple and straightforward as possible'.
The proposals include alternative ways of setting and collecting the levy. Instead of adding a percentage on to the cost of an overnight stay, as set out in the legislation, the industry notes in the letter that it has developed a 'simple, proportionate fixed fee approach for discussion'. It states that it has identified a 'digital-first solution to remove the burden from accommodation providers collecting a levy by introducing a visitor QR code system paid directly to local authorities', stating that this would reduce the 'time and financial burden on accommodation providers' as well as avoid the 'risk of small businesses being pushed over the VAT threshold'.
The letter also notes that the industry has identified a legal route to amend the legislation through section 78 of the Visitor Levy (Scotland) Act.
But after a meeting with Mr McKee, the signatories of the letter state that they have been 'left disappointed that rather than exploring these ideas further, the Scottish Government currently plans to take no further action'.
'We strong believe that we cannot wait for the required three-year report on the operation of the Act,' the letter adds.
'It is frustrating and disheartening for a nationally significant sector that making any significant changes to the legislation is seen to be too challenging to deliver – despite the damage it risks inflicting on the business community, sector, and wider economy.'
The 78 signatories of the letter include a wide range of tourism and hospitality groups, chambers of commerce, and 25 independent businesses operating in the sector.
The correspondence underlines the commitment of the signatories to working with the Scottish Government through the New Deal for Business, which 'should ensure that the purpose, content, and timing of regulations always consider the potential opportunities and impacts on business and investment'.
'However, the sector and its partners firmly believe that, without urgent changes, the visitor levy will fail at the first hurdle of implementation, causing harm to both Scotland's economy and individual businesses,' the letter adds.