SLTA demands Scottish government admits ‘visitor levy’ is a business tax

30-May-2024 - Last updated on 30-May-2024 at 08:09 GMT

Visitor levy: SLTA MD Colin Wilkinson fears ‘additional tax’ may be misspent

The Scottish Licensed Trade Association (SLTA) has demanded the Scottish government must stop calling its upcoming tourist tax a ‘visitor levy’ and admit it is a tax on businesses.

SLTA managing director Colin Wilkinson said: “It’s a tax and not something we support in any way.”

The Visitor Levy (Scotland) Bill, backed by MSPs on Tuesday (28 May), gives councils a new power to introduce a visitor levy that would raise funding for local visitor facilities and services.

While accepting that local authorities will now have the choice to introduce a tourist tax, the SLTA remains sceptical that councils will fully use the extra revenue for its intended purposes.

Will revenue be ring-fenced?

The early stages of the bill stoked fears hospitality businesses would face “more red tape” almost a year ago.

Wilkinson continued: “We have already picked up on some local councillors having the view that this could replace current budget spending so the question remains: will this extra revenue for local councils be truly ring-fenced for the purposes it was intend for?

“We already have experience of councils withholding revenue from the liquor licensing regime, which was supposed to be cost-neutral.”

He added that while there are regulations allowing Scottish government ministers to intervene when local authorities impose excessive visitor levy charges, if charges are deemed excessive or revenue raised has been misspent, this would be another process to go through for the business community with a “a lengthy arbitration process to resolve matters”.

Hospitality must be in future discussions

Wilkinson explained: “Tom Arthur, the employment & investment minister, points out that ‘21 European countries have some kind of visitor levy’. However, he conveniently fails to mention that our European neighbours do not charge 20% vat on accommodation.

“Now our visitors requiring accommodation, both foreign and domestic, will have a further tax added on to their accommodation bills and, to add insult to injury, VAT will also be added on to the visitor levy, so it’s a ‘tax on a tax’.

Wilkinson stressed the need for the new legislation to be flexible for businesses and to ensure the licensed hospitality sector is involved in all future discussions with local councils intent on introducing a visitor levy.

“We accepted this week’s decision but, in our view, its introduction is yet another burden on a hard-pressed sector still recovering from the pandemic and navigating current and ongoing costs of doing business.”