Visitor Levies are in the news now that the English government will introduce them based on the Scottish model. But the Scottish Visitor Levy is, quite frankly, disastrous. Read on to find out about some of the issues…
The Scottish Government’s primary legislation creates problems which Councils can do nothing to solve.
You don’t pay the levy direct to the council. Instead the levy will be calculated when you book your accommodation, included in the payment, and processed by the host.
This costs the host time and therefore money to administrate. Worse than that, it will put many small hosts out of business in areas like rural Sutherland where tourism is an important income stream for crofters with few other economic choices. This is because it will take many of them over the VAT threshold and force them to increase their prices by over 20%. This is an uncompetitive rise in a competitive market.
Everyone will be charged, with some people having the opportunity to claim the costs back.
You will have the admin burden of claiming the cost back if you are exempt due to disability, for example. And and of course people at the council has the admin costs of administrating your claim.
Campervans and motorhomes can only be charged in campsites, and cruise ships won’t be charged at all.
This incentivises irresponsible tourism and pollution due to people disposing of their washing up water and even the contents of their toilets in the wild. Highland Council have not said if they will collect the levy from campervans and motorhomes staying in their car parks over-night.
The calculations are complicated and rely on booking platforms to implement them.
The Council have not confirmed how to set up the the tax on Airbnb and Booking.com. It may be possible to set them up, but it’s not guaranteed. And platforms for direct bookings will all have to change to support the different councils’ rules across Scotland and the UK.
Highland Council is about to go through its second consultation exercise, after the first consultation produced overwhelming opposition to their proposals.
I think they will impose the levy anyway, but it is important they cannot say they were not warned.
Please do respond to the consultation.
I cannot tell you HOW to respond of course. But you might like to know my take on some of the issues.
I’ve summarised some for readability.
The consultation starts off by asking if you are a Highland resident and / or property owner, and then has some optional questions about protected characteristics like age and gender. Then we get the main questions.
To what extent do you agree with the position to apply a Visitor Levy to purchases of overnight accommodation throughout the whole of the Highland Council area?
The Council covers about a third of Scotland’s land area, and unsurprisingly areas within it vary considerably in social and economic terms. What works in Inverness is often disastrous in the remoter regions of Sutherland. But the question assumes that one size will fit all, without taking account of the impact in the areas with more fragile economies.
To what extent do you agree with the proposal to introduce a Visitor Levy Scheme in Highland by Summer 2028?
To be fair, eighteen months feels reasonable, but will it be enough time for the booking platforms make the changes to the booking and billing software?
To what extent do you agree with the proposed position to operate the scheme indefinitely?
The Council is not proposing any sort of pilot or trial. They plan to implement it fully, in one go, everywhere, forever. This is a brave decision, and I do not mean that in a good way.
To what extent do you agree with the proposed position to apply the levy from March through November?
I spent 25 years in systems and process design, and I strongly doubt that this business rule is workable. These calculations must be done by the host’s booking platform so the final price can be shown to the guest. There are dozens of platforms to choose from, not to mention the likes of Airbnb and Booking.com. The work-around will be to add it into the price and fudge the calculations.
To what extent do you agree with the proposal to set the levy amounts as above?
This is the only change that the Scottish Government made to the primary legislation. Their original proposal was that the levy should be a percentage on accommodation but not charged for ‘extras’ like breakfast. It makes the calculations marginally simpler, but does not address the fundamental flaws.
The Highland Council say that the Visitor Levy Scheme Objectives are to:
The Visitor Levy Scheme Objectives together with the Council’s Sustainable Tourism Strategy will provide the strategic direction for making those decisions.
To what extent do you agree or disagree with the proposed Visitor Levy Scheme objectives?
‘Have you stopped beating your wife?’ There is no good answer to this, because of the way the question is posed.
Of course these objectives sound great. The real question is will the Levy help or hinder them?
They also mention the Sustainable Tourism Strategy. But this will increase the existing pollution from outdoor toileting and grey- and black-water discharges because there will be more ‘wild’ and ‘off-grid’ camping when motorhomes and campers can avoid the levy by not using camp sites.
To what extent do you agree with the proposed position to permit liable persons to retain a maximum of 5% of any levy payable to offset business collection and compliance costs?
I am usually booked out for 200 – 250 nights per year. That works out at about fifty quid or so to cover the costs of
Fifty quid won’t cover the cost of the gin!
I joke, but it’s two hours at £25 an hour, or just over three hours at £15 an hour. It’s insulting.
The Highland Council’s Proposed Position:
Annual reports will be prepared for the Visitor Levy Scheme and will include a range of information, for example, how the net proceeds have been used and progress on achieving the Scheme objectives…
At least every 3 years a review of the Scheme will be undertaken… and a decision taken at that time to determine whether to continue the scheme unchanged, modify it, or revoke it.
The Council will share and engage with the Visitor Levy Forum regarding these reports and will seek advice from the Forum on relevant matters, including operation of the Visitor Levy Scheme in Highland.
To what extent do you agree or disagree with the position on the review of decisions related to the proposed levy scheme?
So they won’t track the number of places that close because of the visitor levy? Or the number of businesses pushed over the VAT threshold? Or the amount of time it actually takes hosts to implement it? They are only looking for will only report on the good news.
The Council has considered that a Highland resident exemption would be highly complex and costly to administer…
To what extent do you agree or disagree with the proposed position on discretionary exemptions?
So it’s not a tourist tax
Highlanders often have to stay elsewhere in the Highlands, for example for work, because ferries are cancelled, or to support family members during hospital stays. It can take three hours to drive from one side of the Highlands to another. Though I do appreciate these are local problems for local people.
The arrangements for the administration of all exemptions will be on a reimbursement basis, upon presentation of the relevant documentary evidence of entitlement directly to the Council.
To what extent do you agree or disagree with the position on the reimbursement of exemptions?
So it’s not like having a bus pass or a blue badge, where you don’t pay because you are exempt. You will be exempt if you are on disability benefits, experiencing domestic abuse, or homeless, but you will have to pay first and claim back later.
But these circumstances make life-admin hard, if not actually impossible. Yes, there are privacy issues involved in handling exemptions before payment, but this approach is lazy legislation designed by people who assume they will never be affected by it.
The Highland Council will establish a Visitor Levy Forum within 6-months of deciding to implement a Visitor Levy Scheme, with representation from Highland tourism businesses, communities and relevant tourism organisations. The Forum will have an important role in considering and advising on the use of the net proceeds. The Forum will be advisory, and its purpose will be to provide advice to the Council in a number of areas relating to the operation of a Visitor Levy Scheme.
To what extent do you agree or disagree with the position on how the Council will make decisions on the net proceeds from a Visitor Levy and the use of funds in the proposed Reinvestment Framework?
Nothing is easier to ignore than an advisory forum.
To what extent do you agree or disagree with the position on the visitor levy being payable by all businesses, including those below the VAT threshold?
This will put people out of business when they are forced to increase prices by more than 20% in a competitive market.
The visitor levy is included in turnover (currently £90,000), so anyone whose turnover is just below that risks being forced to increase their prices by more then 20% to cover the
VAT. This is turnover, remember, and not profit, which is a LOT lower.
Accommodation is a price-sensitive product, they will lose business, and drop below the threshold, and then bounce up above it again.
Madness.
The Highlands include fragile economies with few options, and a precious environment already being damaged by irresponsible tourists in camper vans and motorhomes. These issues are particular to the Highlands. I do not think this visitor levy, in this format, is appropriate here.
My name is Ben, and I have run a holiday cottage in Caithness since 2018.
I supported a Tourist Tax two or three years ago. Tourists have an undeniable impact on the Highlands, if only because they are the reason we need Rangers to protect the environment, not to mention public loos and the problems with potholes.
But the first consultation gave me the fear, and was an important part in my decision to close my business. This second consultation is our last chance to get our views across. If you have the time, please complete it. I cannot tell you what to say, but hopefully I have given you food for thought.
Being human matters, which is why this post was written by me, and not by AI.
