Two-thirds of local authorities in Scotland are considering a Visitor Levy, or tourist tax, following confirmation of the country’s first scheme in Edinburgh, according to research by the Federation of Small Businesses (FSB) in Scotland. 

Data compiled by FSB Scotland shows 21 out of 32 Scottish local authorities have been either discussing the idea or are actively pursuing plans to introduce a local levy. The FSB research is based on local authorities’ public statements and briefings about a Visitor Levy. 

Aberdeen City Council is considering a 7% levy, which would be one of the highest in Scotland. Edinburgh last month agreed a 5% charge.

FSB Scotland today said councils must work with small accommodation providers as they develop their plans. 

Andrew McRae, FSB Scotland’s policy chair, said: “Small businesses will play a key role in implementing and operating any local Visitor Levies introduced across Scotland. Without the central IT and accounts of the big hotel chains, guesthouses and B&Bs will be disproportionately impacted.  

“They have lots of unanswered questions at this stage about how these schemes will work. How will the national online portal that is being developed for processing the levy work? Will it be ready in time and user-friendly for guesthouse staff who need to use it? 

“Some of our members have warmed towards the idea of the Visitor Levy. They see the value in some of the potential investment which has been outlined in local infrastructure and services for the good of visitors, residents and businesses alike. 

“However, it would be wrong to assume just because there are ‘tourist taxes’ operating around the world that any scheme will automatically work effectively in a particular local authority area in Scotland.”

Commenting on the proposed Aberdeen levy, Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “Aberdeen City Council are putting the cart before the horse. If they desire to grow their tourism-related economy, this is precisely the wrong way to go about it.

“A punitive rate of 7% would be more than that envisaged by other cities like Glasgow or Edinburgh. Moreover, it is important to understand this is a tax on a tax: the 7% levy itself would be subject to 20% VAT, something unheard of in Europe. Other destinations have a reduced rate of VAT on tourism services, where Scotland does not.

“The council also need to be open about who will be paying. This is not an ‘international’ visitor levy paid only by foreign tourists… it will be a tax on those with overnight stays taking in a concert at the P&J Live or Music Hall; it will be a tax on those staying in accommodation while visiting a relative at Aberdeen Royal Infirmary; and it will be a tax on key workers in the energy industry requiring a stay before heading offshore.”