What is a Visitor Levy?
The Scottish Government's visitor levy legislation (), passed in 2024, allows local authorities to introduce a charge on overnight stays in hotels and other short-term accommodations, to raise funds to support and sustain local services and infrastructure for the visitor economy and residents. Many elements of the visitor levy are set in law and councils cannot change them. These include the types of accommodation covered, the application of the visitor levy as a percentage of accommodation charges per person, per night, and that councils are legally required to consult extensively with local communities, businesses, and stakeholders before implementing the levy. While councils can decide if they will introduce the visitor levy and on the percentage rate levied, they must reinvest funds raised to help manage the impact of tourism and enhance visitor experiences. They are also statutorily required to report annually on how this has been done.
Where can I find further information on the Visitor Levy?
Visit Scotland has a summary of the national guidance on the visitor levy on their website, including FAQs for tourism businesses - .
The council website also has information about the proposed Visitor Levy Scheme in Ƶapp - Ƶapp Visitor Levy. This page is updated regularly as and when plans progress.
We have also set up a Visitor Levy Short Life Working Group to progress the potential implementation of a visitor levy in the area and minutes of every meeting can be found here - Agendas and minutes - Short Life Working Group on Ƶapp Council Visitor Levy.
Does the council have to introduce a visitor levy?
It is not mandatory for the council to introduce a visitor levy. However, with growing tourism pressures and shrinking public sector budgets, we need to investigate options that could help raise income locally, sustain relevant public services impacted by the tourism industry, and make improvements to the future delivery of tourism across Ƶapp. Many other Scottish councils are also considering implementing a visitor levy.
When could a visitor levy come into effect in Ƶapp?
The council has not yet decided whether to introduce a visitor levy. However, if a scheme is progressed, it could not come into force until the end of 2026 due to the necessary steps required, such as mandatory consultations.
How can I have my say on the Ƶapp visitor levy?
There will be opportunities over the coming months for residents, tourism businesses and organisations and anyone else who could be affected by a visitor levy to have their say. We will publicise details of how to get involved. We received more than 1,200 responses to an initial Pre-Consultation Survey on the levy and, if approved by councillors on 20 December 2024, we plan to run a full 12-week consultation in late December 2024/early January 2025. A Shadow Visitor Levy Forum of tourism representatives also provides advisory input to deliberations about the local levy. We would establish the main Visitor Levy Forum within six months of formal public announcement of a decision to introduce a Visitor Levy Scheme in Ƶapp.
What tourist businesses would be included in the visitor levy?
The final scope of the proposed levy is still to be determined, but it can only apply to overnight visitor accommodation such as hotels, B&Bs, guesthouses, campsites and caravan parks, short term lets etc. The legislation does not include wild camping, campervans and cruise ship visitors.
Who would have to pay the levy?
A levy would apply to visitors staying overnight in hotels, hostels, guest houses, bed and breakfasts, self-catering accommodation, camping sites and caravan parks. Legislation has some statutory exemptions for visitors with disability, but details such as number of nights charged (i.e. a cap) will be part of the consultation and subject to approval by council.
Are there any statutory exemptions from the Visitor Levy?
Section 13 of the Visitor Levy (Scotland) Act exempts all individuals in receipt of the following UK disability benefits, payments, or allowances from paying the levy:
- Disability Living Allowance
- Disability Assistance
- Attendance Allowance
- Pension Age Disability Benefit
- Personal Independence Payment
The legislation’s scope does not apply to people who are using overnight accommodation as their only or primary residence, people staying on certain gypsy / traveller sites and people who use accommodation on overnight transport like ferries, cruise ships, or sleeper trains.
How much would visitors have to pay?
The law requires visitors to pay a percentage rate based on the accommodation cost. If the council agrees to proceed to the next stage of a Visitor Levy Scheme in Ƶapp, it will approve the rate and possible caps following the formal consultation process. The legislation only requires that the visitor levy be charged if a person actually spends a night at an accommodation business. Businesses would only be required to remit the levy charged to the local authority after a stay is complete.
How much would the visitor levy raise?
This would depend on the percentage amount set by the council and the scope once the statutory exemptions are taken into consideration and the levy rate, caps etc. have been agreed. As an example, early indications are that a 5% levy could raise up to £9m a year, however, the council has instigated expert work to determine more accurate predictions.
How would the proceeds of a visitor levy scheme be spent?
The legislation requires that net proceeds of a visitor levy scheme must be spent on developing, supporting and sustaining facilities and services that are substantially for, or used by people visiting the scheme area for leisure or business purposes (or both). In other words, it must be spent to benefit the local visitor economy. The consultation process would help shape how the proceeds of the levy could be spent locally.
Would the money raised in each area be reinvested locally or would it go into a central fund for improvements across Ƶapp?
Funds from the visitor levy would be re-invested across the whole council area to help raise income locally, sustain relevant public services impacted by the tourism industry, and make improvements to the future delivery of tourism across Ƶapp.
Who would collect the levy from visitors?
Legislation requires accommodation providers to be responsible for collecting the levy from visitors and paying it to the council. However, much consultation and work on collection processes and systems will be required to determine how this would operate in practice, hence the long lead in time for the scheme. The aim would be to make this as simple as possible for businesses.
Would the levy be included in business turnover for the VAT threshold?
HMRC has determined that amounts charged for the visitor levy will be included in the turnover used to determine if businesses need to register for VAT.
What support would councils give to businesses collecting the levy?
This will be determined if councillors agree to proceed with the proposed levy. It would be influenced by work on collection processes and systems required to determine how the scheme would operate in practice. If agreed, it will form part of the extensive consultation.
Would a visitor levy deter visitors from coming to Ƶapp?
The council is considering a levy as a potential route to supporting the tourism industry and therefore a route to sustaining the appeal of the area for visitors. The council is required to undertake full economic and equality impact assessments as part of any Ƶapp change of this type. However, the Scottish Government did a national assessment as part of the Levy legislation and their (sections 69 and 70) found “a compelling case that taxes on visitor accommodation do not appear in practice to be linked to noticeable negative impacts on visitor demand for accommodation”. It was also observed (section 79), that “59% of international travellers surveyed want to leave the places they visit better than when they arrived”. The levy would also provide funds to enhance Ƶapp’s tourist offer and attractiveness over time and there are many international examples of the success of this approach.
Would money raised by a visitor levy be swallowed up by administration costs?
No. The aim of a levy scheme is to create investment for use in supporting and sustaining local tourism. The council will not know the exact costs to manage and run a potential scheme until the scope and processes of the scheme are decided. However, the Scottish Government’s assessment of the ongoing cost to councils in its (sections 39-45), was £190-500k a year and £110-£480k initial set up costs. This is set against an initial estimate of £9million a year income from an Ƶapp wide visitor levy based on a notional 5% levy. Ƶapp Council is also working with a number of other councils and the national Improvement Service to explore the sharing of costs to build a joint Levy Management System that would reduce costs.
Is the Levy a “Stealth Tax” on hosts that won’t be spent to help improve the visitor economy?
No. Areas use visitor levies to raise income that supports and sustains local tourism, for the benefit of local tourism businesses, communities and visitors. If the council approves a levy, the Scottish Government legislation requires that every penny of the net amount raised must be spent on supporting and sustaining local services and infrastructure for the visitor economy and residents. What the money would be spent on will form part of the extensive consultation and many ideas were submitted as part of the Pre-Consultation held in October 2024. In addition, the law requires that any council running a levy scheme must provide an annual report detailing the monies raised and what it was invested in, so there would be full transparency on that. Hosts would not be taxed, they would be collecting the Levy from visitors staying overnight and remitting it to the council to be re-invested across the whole council area.