The Visitor Levy (Scotland) Bill – or "tourist tax" as it is being more plainly named by some – has been passed by the Scottish Parliament. The earliest we are likely to see the levy introduced will be Spring 2026. Each local authority will have discretion as to whether they introduce this.
A cautious response from industry
The Bill has been divisive throughout the consultation stage and continues to receive a mixed response from industry bodies.
UKHospitality Scotland have welcomed the minimum 18-month lead in period after a Council decides to adopt the levy, acknowledging that this provides time for engagement between Local Authorities and the hospitality businesses affected.
Marc Crothall, Chief Executive of The Scottish Tourism Alliance, recognises that it has been a contentious issue for the sector and was keen to drive home the message that any taxes raised "must be used to enhance tourism, which as a sector delivers significant economic benefits for the nation and our communities".
The Scottish Licensed Trade Association stated that it is not supported by them "in any way", viewing it as another challenge for an already burdened sector.
The common recurring points of concern raised by hospitality businesses are: How onerous will the levy be for us to implement? Will it negatively impact our operation? How are the funds generated reinvested to the benefit of our sector?
Mixed local authority reactions
Edinburgh and the Highland Council have been vocal supporters, perhaps unsurprisingly, as two of the Local Authority areas most impacted perennially by high tourist traffic. Both are confident that the perceived drawbacks of increasing costs for tourists will be outweighed by the potential revenue income that can be generated for reinvestment, and that the levy is unlikely to deter visitors to their area.
Local Authorities where tourist footfall is less of a year-round burden on resources may be unlikely to introduce the levy if a cost-benefit analysis of doing so indicates that setting up and managing the tax is too much of a burden for too little gain for the authority and operators in the area.
On the horizon
A notable exception from the levy is that it does not catch visitors arriving to Scotland by cruise ship. As it stands, it will apply only to overnight guests in hotels, B&Bs, and holiday lets. With a significant increase in cruise traffic in Scotland this year – particularly in Orkney, Inverclyde, and Aberdeen – there is renewed demand for an equivalent Cruise Ship levy. MSPs from the aforementioned local authorities have expressed support for such a levy, and it has previously received backing from the Scottish Greens and Scottish Lib Dems.
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