The guidance provides:
- local authorities with information on how they may want to progress with the implementation of a visitor levy
- a best practice case study along with hypothetical examples to assist local authorities in developing a visitor levy
The visitor levy adds an important dimension to the sector's vision of being a world leader in 21st century tourism and being the perfect stage for events.
The Scottish visitor economy supports businesses, jobs, and communities across the country. It is one of six Scottish Government growth sectors and is worth £10.7 billion (circa 6%) to Scotland’s economy.
With the levy, local authorities now have the power to generate revenue specifically for the benefit of the visitor economy.
If developed collaboratively between local authorities and businesses, a visitor levy scheme represents a unique and significant opportunity to deliver multi-million-pound annual investment in the sector.
We have brought together the tourism industry, local authorities and government to deliver statutory guidance for local authorities on the visitor levy.
The additional information on this page provides:
- details of proposed and introduced visitor levy schemes
- details of open consultations and how people can make responses
- some FAQs for businesses and visitors who might be impacted by a visitor levy
The guidance provides detail and advice on the process a local authority might take in implementing a visitor levy. We developed this guidance with input from representatives from the tourism and accommodation sector.
We will continue to consider and review the guidance as local authorities bring forward proposals for visitor levy schemes. This way, we will ensure that the guidance is meeting the needs and expectations of all those who have an interest in the visitor levy.
Visitor levy guidance
Published October 2024
Read the visitor levy guidance in full.
Glossary
Published October 2024
Browse our glossary to help you better understand the terms used in the visitor levy guidance.
Best practice case studies for local authorities
Local authorities looking to bring forward proposals for their own visitor levy scheme may want to consider what others are doing. We’ve collated some examples of best practice from other visitor levy schemes to help with your own thinking.
Case studies will be added once visitor levy schemes are in place.
Proposed visitor levy schemes
All 32 local authorities in Scotland have the power to introduce a visitor levy. Please find a list of which authorities have proposed visitor levy schemes and how to contribute to the consultation.
Visitor levy schemes are currently proposed in
-
City of Edinburgh Council
The council is proposing a levy of 5% on overnight accommodation, applied to a maximum of seven nights.
The majority of the funds are proposed to be spent on:
- city operations and infrastructure (55%)
- culture, heritage and events (35%)
- destination and visitor management (10%)
Main contact details for the council are: visitorlevy@edinburgh.gov.uk.
The council's formal consultation period is now live until 15 December 2024.
Participate in the consultation on consultationhub.edinburgh.gov.uk.
Highland Council
The council is proposing a levy of 5% on overnight accommodation with the following three objectives:
- sustain public services and infrastructure used by businesses, communities, and visitors to ensure the impacts of visitors are strategically and sustainably managed
- support the delivery of a thriving tourism sector that can offer a wide range of visitor experiences by working together in partnership with businesses, visitors, and communities
- develop innovative approaches to balance strategic demands and opportunities, ensuring the council achieves its full potential as a highly positioned destination for visitors
Main contact details for the council are: visitorlevyconsultation@highland.gov.uk.
The council's formal consultation period is now live until 7 February 2025.
Other scheme updates from local authorities
The following local authorities have not yet started a formal consultation yet. But they are conducting some early engagement activities to help inform their plans.
There are currently no local authorities with a visitor levy scheme in operation.
How will the visitor levy impact my business?
Local authorities now have the power to introduce a percentage levy on paid overnight accommodation.
Businesses should look to engage with their local authorities at the earliest opportunity. This allows them to help shape proposals that meet their own needs and will deliver the best outcomes for the visitor economy in their area.
If developed collaboratively between local authorities and businesses, this could mean millions of pounds of transformational investment in the sector.
It is therefore important that the objectives of a visitor levy align with:
- relevant local tourism strategies
- other related local, regional, and national strategies that are directly linked to the visitor economy
Each visitor levy scheme will be determined by the local authority. It will be for them to set out how the scheme will operate and determine any support they might offer to businesses collecting and remitting the levy.
Engagement from businesses in the process of developing a scheme will be critical. So, businesses are strongly encouraged to get involved.
We expect that local authorities will work closely with the accommodation sector in their area as they develop visitor levy proposals. This will ensure that the local authority proposals will be well understood by the businesses collecting and remitting the levy where it will be charged.
Local authorities are also required to establish a "visitor levy forum" for any scheme brought forward. This will represent an opportunity for ongoing industry engagement and advice throughout the lifetime of the scheme.
The minimum 18-month implementation period will be the ideal opportunity for local authorities to provide necessary support for businesses ahead of a scheme coming into force.
Industry trade bodies have been involved in the development of the visitor levy guidance for local authorities. Accommodation providers may wish to speak with their trade body for more information.
Tourism business FAQ
Detailed questions that businesses will have about a proposed visitor levy will be for the local authority to answer.
The following information is pulled from the visitor levy guidance to give you a quick overview of some of the topics covered.
However, it's recommended to engage early with your local authority for a full understanding of how your business might be impacted and what support might be available.
What will my local authority levy scheme look like?
If your local authority is considering bringing forward a visitor levy, it should be taking forward early engagement to inform this process ahead of bringing forward a consultation. Please check your local authority's website, or contact your local authority directly in the first instance.
We are keeping this webpage up to date and have included a section on proposed visitor levy schemes. We will put useful information in this section as it becomes available.
Currently, the City of Edinburgh council is proposing the introduction of a visitor levy. It is proposing a 5% levy applied to a maximum of seven nights.
Any use of revenue will have to have regard to any tourism or other relevant strategy linked to the visitor economy. However, the specifics of this will differ for each local authority.
Each year the local authority is required to produce a report on its visitor levy scheme, including on how it has used the funds generated. You can direct customers to this report to inform them on how contributions are being spent.
Before the first annual report is published you can direct customers to the objectives of the visitor levy scheme.
Please see chapter 12 "use of funds" in the guidance for more information and engage with your local authority to understand their plans.
If you have properties in multiple local authorities, you will need to engage with each of those local authorities to understand whether or not they will bring forward proposals to introduce a visitor levy scheme. Local authorities may also deliver a scheme collaboratively.
See information on this page on proposed visitor levy schemes and visitor levy schemes currently operating. We will keep this information up to date on a regular basis.
How will the visitor levy be calculated?
The visitor levy should be on the accommodation portion only. That means charges for breakfast, parking, Wi-Fi or any other services should not be included in the calculation.
Your local authority may publish detailed information on how to estimate various portions of the charge. You should refer to information that the local authority publishes to understand their plans.
An example of how to calculate a levy for B&Bs and self-catering is included in chapter 10 "calculation of a levy".
The visitor levy legislation does not determine how the levy should be listed when it is charged. Existing rules on pricing therefore apply.
Unless specified differently by your local authority and provided doing so would be compliant with relevant regulations, it is likely that you should be able to either:
- include the charge within the room rate
- include the charge within the final tour package price
- list the charge as separate
It is, however, important that you are transparent with the customer about the fact that a levy will apply.
It is recommended that businesses engage with local authorities who propose a visitor levy on this matter. You may also wish to contact your local Trading Standards office for support. The guidance contains example calculations for B&Bs, hotels, self-catering, and more.
Please see chapter 10 "calculation of a levy" in the guidance for more information.
There are a number of groups / individuals that are either not within scope or exempt from any levy. These are:
- certain people who are using overnight accommodation as their only or primary residence
- people staying on certain gypsy / traveller sites
- people receiving specified UK and Scotland disability benefits, payments, or allowance
- people who make use of accommodation on overnight transport like ferries, cruise ships, or sleeper trains
Local authorities also have power to introduce local exemptions that meet their own needs. They are encouraged to ensure limited administration / financial burden on businesses should they introduce any additional exemptions.
Please see the chapter 17 "exemptions" in the guidance for more information and engage with your local authority to understand their position.
What is the process for paying for the visitor levy?
An online reporting platform is being developed by some local authorities with the Improvement Service, with the intention that it will be used nationally. Your local authority will confirm this and any other systems with you once available.
This will depend on the local authority. However, the current intention with the Improvement Service platform (see "Are there specific software or tools recommended for managing the visitor levy") is for returns to be made quarterly.
Please see chapter 16 "remittance" in the guidance for more information and engage with your local authority to understand their plans.
Can I get relief for any business costs incurred, and what are the VAT implications?
Local authorities are encouraged to consider certain business costs. It will be for the local authority to decide if and how they might support businesses in this context.
The City of Edinburgh Council has proposed to use levy funds to mitigate costs for accommodation providers (1.5-2.5% of payable funds).
Please see the section "business costs" within chapter 14 "assistance to liable persons" in the guidance and engage with your local authority for more information.
Local authorities have the power to support businesses accordingly. This could take the form of providing information on collecting and remitting the levy or providing some form of financial relief.
Local authorities don't have any statutory requirement to provide support and it's up to the local authority to decide which support they will provide, if any.
Please see chapter 14 "assistance to liable persons" in the guidance for more information and engage with your local authority to understand their proposals.
If you are VAT registered you would have to pay 20% VAT to HMRC over both the accommodation charge and the visitor levy.
Please see the section "VAT" within chapter 10 "calculation of a levy" in the guidance for more information, including an example calculation on VAT.
Any amount you charge for the visitor levy will be included in your turnover. This will be used to determine if you need to register for VAT.
It's at the discretion of the local authority to include or exclude businesses that fall below the VAT threshold because of the visitor levy scheme. A local authority must state whether it intends to include businesses below the VAT threshold in its visitor levy scheme.
Please see the section "VAT" within chapter 10 "calculation of a levy" in the guidance.
You will have to charge the visitor levy if the local authority has confirmed that non-VAT registered businesses are included in the scheme. Please refer to your local authority for more information on whether or not businesses that fall below the VAT threshold will be included.
Please see the section "VAT" within chapter 10 "calculation of a levy" in the guidance for more information.
Communicating to your visitors
You may wish to consider updating your promotional material, adverts, and website to reflect the introduction of a visitor levy.
When displaying the price for the accommodation services provided, you should follow existing regulations on pricing. It should be clear to the customer that a visitor levy applies.
This should be clear for those who book in advance as well as for those visitors who walk in on the day of purchase without having pre-booked.
When displaying the price for the accommodation services provided, you should follow existing regulations on pricing. It should be clear to the customer that a visitor levy applies. Existing regulations may be useful, such as the:
- Price Marking Order 2004
- Digital Markets, Competition and Consumers Act 2024
- Consumer Protection Approval Order 2005
If you have not done so already, you can contact your local Trading Standards office for support. Local authorities are encouraged to work closely with accommodation providers at an early stage to ensure that invoicing is handled correctly.
Please see chapter 15 "billing of overnight accommodation" in the guidance and engage with your local authority for more information.
How will the visitor levy impact bookings / cancellations?
In this scenario, the visitor levy would apply and the accommodation provider would remain the liable person. In these circumstances, an accommodation provider would have two choices:
- Charge the levy at the point of booking
- Charge the levy at point of entry to the property
In both cases, the levy collected should not be returned to the local authority until the visitor has stayed in the accommodation.
It will be for the local authority and businesses to consider arrangements for collecting a levy from bookings made after the visitor levy scheme comes into effect but before accommodation providers have put a system in place.
Please see the section “transitional provisions” within chapter 13 "liable persons" in the guidance for more information and engage with your local authority who may be able to provide additional support.
If a visitor refuses to pay, you are allowed to cancel their booking. Alternatively, you can choose to absorb the cost of the levy yourself.
Please see the section "refusal to pay" within chapter 13 "liable persons" in the guidance for more information and engage with your local authority who may be able to provide additional support.
The legislation only requires that the visitor levy is charged if a person actually spends a night at your accommodation business. You should only remit the levy charged to the local authority after a stay is complete.
If the visitor does not stay in your accommodation and no levy payment has been received, you do not need to take any action. If the visitor already pre-paid the levy but did not stay in the accommodation, you'll have to refund them the levy in full.
Any payment for the accommodation portion of the booking should be refunded in line with your refund policy.
Please see the section "cancellation" within chapter 13 "liable persons" in the guidance for more information and engage with your local authority who may be able to provide additional support.
As the accommodation provider, you will always remain the liable person. However, you can make arrangements for third parities to collect and remit the levy on your behalf.
Depending on the contract you have with a particular online travel agency, there may be costs associated with charging the levy on the agency's commission for the accommodation provider.
Local authorities may wish to consider supporting businesses with costs associated with collecting and remitting the levy.
Please see chapter 13 "liable persons" and chapter 14 "assistance for liable persons" in the guidance and engage with your local authority for more information.
What personal data of visitors do I need to record?
Your local authority will communicate which information you need to submit to them as part of your returns (remittance).
Please see chapter 16 "remittance" in the guidance for more information and engage with your local authority to understand their position.
If the local authority chooses to operate exemptions via a process of reimbursement, then the visitor eligible for exemption would pay the levy as any other visitor would.
Following the completion of their stay, the visitor would follow the steps outlined by the local authority to receive the relevant reimbursement from the local authority. In this instance, the visitor wouldn't be required to show any documentation to the business.
The legislation allows for the local authority to allow for the business to process the reimbursement. In this case your local authority might ask you to handle personal and sensitive data on visitors who are exempt.
Local authorities are encouraged to recognise any administrative burden that this incurs and take appropriate steps.
Please see chapter 17 "exemptions" in the guidance for more information and engage with your local authority to understand their position.
