Controversial plans to impose Scotland’s first ‘tourist tax’ have been given the go-ahead.
The City of Edinburgh Council yesterday agreed to proceed with a 5 per cent per night fee on overnight accommodation.
It will apply to stays taking place after July 24, 2026, with bookings paid for in part or in full after October 1 this year being liable for the levy.
It is expected to raise up to £50million a year for the authority, which is the first to proceed with the charge since legislation was introduced by the SNP Government giving councils powers over a visitor levy.
Tourism bodies raised concerns about the impact it will have on Edinburgh’s economy and its competitiveness as a visitor destination.
Leon Thompson, executive director of UKHospitality Scotland, said: ‘Not only has Edinburgh’s visitor levy been confirmed, but so too has the hit to the city’s competitiveness as a leading tourist destination.
‘Our fundamental concern has always been that this levy will only serve to make visitors trips to Edinburgh more expensive, ultimately reducing their spending in the wider visitor economy and deterring future visits.
Hundreds of thousands of tourists flock to Edinburgh every year
Those travelling to the city for its world famous festival will now find their trip more expensive
‘It’s now the job of the council to use these funds wisely to improve the capital’s attractiveness as a visitor destination and mitigate the impact of the levy on businesses.’
Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers, said: ‘We are extremely disappointed that Edinburgh Council has failed to properly appreciate the widespread concerns of our sector who are the ones responsible for administering this tax.
‘While the transition period will be altered by a few months, there remains very clear operational impossibilities. In the rush to be first, rather than getting it right from the get-go, their slapdash approach risks undermining the levy before it has even started.
‘Edinburgh will be a guinea pig for this new tax and hopefully other councils will now take stock and learn from the mistakes made.’
She also raised concerns that Edinburgh will be an ‘outlier’ because its levy is subject to 20 per cent VAT and is applied to domestic visitors as well as international.
She added: ‘We understand the rationale behind a visitor levy but a badly implemented policy will do more harm than good, damaging the very industry it is supposedly meant to support.’
The law giving councils the power to impose a ‘visitor levy’ on overnight stays came into force last September.
It allows councils to impose an additional charge on overnight accommodation but does not set out any rules for the level of fee.
The proposal was approved at a special virtual meeting of City of Edinburgh Council yesterday after it was backed last week by the authority’s policy and sustainability committee.
The Green and SNP groups on the city council urged the Labour-run administration to adopt a higher rate of the levy, proposing 7 per cent and 8 per cent respectively, and argued more money is needed for housing in the city.
Conservative councillor Iain Whyte said his group did not back the levy, arguing it will damage tourism.
Council leader Jane Meagher said: ‘What an historic moment for Edinburgh. Introducing this ground-breaking visitor levy means realising a once in a lifetime opportunity to invest tens of millions of pounds towards enhancing and sustaining the things that make our city such a great place to visit – and live in – all year round.
‘The scheme has been many years in the making and I’m grateful to council officers, businesses and residents who have helped shape it, every step of the way. Its introduction is declared today with a huge amount of backing, not least from local residents.’
