Scottish council takes first step to £8m-a-year tourist tax

Fife Council has taken the first step to considering launching a tourist tax - but any levy could still be several years away.

The local authority’s cabinet committee has agreed to start discussions on the contentious tax, which could rake in up to £8 million a year.

That figure is based on matching the 5 per cent tourist tax launched in Edinburgh. But councillors were at pains to stress no decisions had been taken - and won’t be until consultations with businesses and communities have taken place.

Fife tourism hotspots - Dunfermline Abbey; the Swilcan Bridge, St Andrews; Culross and Falkland Palace (Pics; Submitted)

Last year’s Visitor Levy (Scotland) Act gave local authorities the power to apply a fee to those staying in paid accommodation within their area. The tax would be collected at point of sale by businesses and passed to the council for spending on projects linked to tourism and the visitor economy.

Edinburgh City Council was the first authority to approve a tourist tax and will charge visitors an extra 5 per cent on top of their accommodation costs from next summer. Highlands, Argyll & Bute, Falkirk, and Perth and Kinross are now also looking at introducing a levy - and Fife is keen to draw on their knowledge to date before taking any decision.

The timescales involved would see a nine-month consultation leading to a report to the cabinet committee in January 2026. With an 18-month notice period required once a final decision is taken, the earliest launch date for any Fife tourist tax would be April 2028.

Councillors agreed to assign an officer to the initiative for the next 12 months, but some sought assurances the Kingdom’s tourism economy would not be damaged by any tax.

Brochures and maps for the Heartlands of Fife tourism campaign (Pic: Fife Free Press)

Councillor Kathleen Leslie, leader of the Tory Group at Fife House, said: ”There is a lot that is very unclear and it feels like another tax being imposed. I do not want people being put off coming to Fife.”

The Burntisland, Kinghorn and Western Kirkcaldy councillor wanted to know if Fifers would be taxed if, for example, they lived in Dunfermline and chose to have a few nights’ stay in St Andrews - or if family members coming to Fife and staying in a B&B would be hit.

“How do we ensure the public are fully aware of the political implications?” she asked. “I’d like a re-assurance that any consultation captures the views of as many people as possible, and understand if there are any unintended consequences such as job losses in the tourism sector.”

But Cllr David Ross, council leader and convener of the cabinet committee, said: “We are not debating whether it is a good idea or not. This is about getting the information and consulting, so we can then take an informed decision.”

A report from Carol Connolly, executive director of place, said a 5 per cent tax could bring in anything between £3.4m and £8.2m a year for Fife Council, with the total amount depending on the number of people staying in accommodation.

Her report said potential benefits of the levy included “a sustainable, year-on-year source of revenue; an enhanced visitor offering; physical and cultural improvements to local areas and increased funding opportunities for community-led tourism projects”.

However, the report adds the potential drawbacks include an increased administrative burden on the council and accommodation providers.

Following the initial discussions and the creation of a draft scheme, a 12 week formal public consultation will take place.