Highland Council warned to 'tread carefully' as 'tourist tax' consultation gets under way

Concerns have been raised over how locals and small businesses in the Highlands could be affected by a new visitor levy as a consultation on the move gets under way.

Highland Council is consulting on a newly proposed “tourist tax” of 5 per cent on accommodation, which it claimed could raise at least £10m a year for the region.

It comes after the Visitor Levy (Scotland) Act 2024 was passed by the Scottish Parliament in May which gives local authorities in Scotland the power to decide on whether to introduce the fee after a consultation.

Accommodation across the Highlands, including Inverness, could see the visitor levy if it is to go ahead following the consultation | Katharine Hay

The tax would apply to all types of accommodation with no exemptions for local people, including reasons such as hospital visits. Those exempt from the levy include the travelling community, accommodation in a vehicle, and for those on board a vessel that is undertaking a journey involving one or more overnight stops.

Highland Council said the revenue could go towards improving local infrastructure to support tourism in the area, which has increased year on year with the likes of the North Coast 500 and the Isle of Skye exploding in popularity. According to official figures, some seven million people visit the region each year.

The 12-week consultation for the Highland region begins today (Friday). If approved, the charge could come into force from autumn 2026.

Locals and businesses in the area have been calling for more funds to go towards improving the local infrastructure for years.

Some businesses, however, warned the proposed tax could be damaging to the local economy and to those wishing to visit locally, and had the potential to discourage people from coming to the Highlands if not implemented carefully.

Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers, said: “Highland Council must tread carefully with plans for a visitor levy. If they do this, they must do it right.

“We have seen that short-term let licensing has been far from plain sailing and the same affected small businesses now look set to become de-facto unpaid tax collectors.

“The accumulative regulatory impact could cripple businesses at a time when recovery is precarious.”

Ms Campbell said the money raised from the levy must be ringfenced for tourist infrastructure.

“Failure to take these steps could result in a levy that erodes the very industry it is supposedly intended to support,” she said.

Her comments echo calls made earlier this year by Skye tourism businesses who said all funds raised through the proposed tourist tax must remain local.

Ms Campbell also warned: “It is not just operators or overseas visitors who will be impacted but ordinary Scots choosing to visit the Highlands will be hit in the pocket too.”

Earlier this year, Mark Crothall, chief executive of the Scottish Tourism Alliance, said the scheme in Scotland would differ from those in places such as Barcelona and New York, which only apply to those visiting from outwith the country, adding: “The perception is that the so-called tourist tax only applies to a tourist, but the transient visitor levy that is being applied in Scotland applies to anyone, a tourist or not, who is staying in overnight accommodation.”

Chairman of Highland Council’s economy and infrastructure committee Ken Gowans said: “The introduction of a 5 per cent Visitor Levy in Highland could generate £10 million each year - money that can be used to sustain, support and develop the services and infrastructure which the sector relies on.

“As well as improving existing infrastructure, it would allow opportunities to look at providing new facilities to help ensure everyone visiting Highland will have a high-quality experience.

The consultation runs until 7 February next year.