Tourist tax in Scotland not the answer, small business owners say

The Scottish Government sought views from small business owners across the country as part of a discussion on the tourist tax

Nicola Sturgeon ordered a review on whether councils should be granted powers to set a local levy on visitor accommodation following demands from some local authorities, including Edinburgh.

Following a Holyrood budget deal with the Greens, ministers are expected to legislate before the end of the year to allow councils to bring in a transient visitor levy.

But in a discussion paper published today, several business owners in the hospitality industry expressed reservations about the plan.

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Derek Connery, the owner of a bed-and-breakfast near Tain, Ross-shire, claimed a tourist tax would be “detrimental” to his business.

“With one of the highest VAT rates in Europe on accommodation Scotland is already an expensive place to visit, and for locations like ourselves the remoteness and high cost of fuel make it even more so,” he said in his written submission.

David Smyth, chairman of the Perthshire Tourism Partnership, said: “Scotland welcomes visitors with one of the highest rates of VAT in the world and we wave them goodbye with the highest level of Air Passenger Duty in Europe. Our visitors are taxed at every point.”

Kim Proven, who runs self-catering cottages in Lochearnhead, argued that “No one wants to pay £2 per night extra just because the council has blown its budget”. She added: “This is just a copycat solution to gaining extra revenue without identifying the problem then listening to possible alternative solutions.”

But other business owners were more supportive, arguing that such a levy could fund infrastructure improvements.

Gary Grant, owner of several self-catering units in the Highlands, said the importance of tourism to rural economies could not be overestimated but added that local roads urgently required investment to meet increasing demand.

“Will an extra few pounds per night stop people coming here, as some of the hospitality experts have said?” he asked. “If the annual migration of UK citizens for their two week break to other parts of the world where tourist taxes are charged, is anything to go by, I don’t think so.”

The Scottish Government had been against allowing councils to set a tourist tax, but Ms Sturgeon signalled a change in direction last year when she said there should be further consultation.