Edinburgh Council Officially Supports Implementation of Tourist Tax

August 23, 2024 TruthUSA

This year, the Scottish Parliament granted councils the authority to implement visitor levies, a move that critics like hotelier Rocco Forte denounce as a ‘pernicious tax.’

Edinburgh has taken a step closer to becoming the first location in the UK to implement a tourist tax, as the city’s lawmakers have approved the measures.

According to the draft plans approved by councillors on Thursday, tourists will be subject to a 5 percent tax on accommodation per night, capped at seven consecutive nights.

The tax will apply to accommodations such as hotels, hostels, bed and breakfasts, and short-term lets (e.g., Airbnb rentals), while campsite stays will be exempt.

Next in the process is a 12-week public consultation seeking input from businesses, residents, and visitors to shape the final scheme, expected to be finalized in January 2025. The Visitor Levy is anticipated to take effect in the summer of 2026.

The City of Edinburgh Council estimates that the tourist tax will generate between £45 to £50 million annually by 2028/2029, with funds being reinvested in the city’s infrastructure and tourism.

The council hails the plans as “groundbreaking,” stating in a release, “Edinburgh will lead as the first UK city to introduce a comprehensive levy, essential for managing the impact of rising tourism while ensuring sustainable investment in the visitor economy, public services, city upkeep, affordable housing, and preservation of the Capital’s cultural heritage.”

‘Pernicious Tax’

Several heritage and business organizations endorse the Visitor Levy, including Neil Ellis, chairman of the Edinburgh Hotels Association, who praised the levy for its potential to enhance visitor experiences through increased spending.

“This presents an excellent chance to further elevate Edinburgh’s global reputation as a must-visit destination,” Ellis added.

On the other hand, UKHospitality Scotland has voiced concerns, with its executive director Leon Thompson warning that the tax could raise costs for both visitors and businesses in Edinburgh, emphasizing the need to keep costs reasonable.

“UKHospitality Scotland will engage with members across Edinburgh during the consultation period and respond, reflecting the sentiments of our members,” Thompson noted.

Earlier this year, the Scottish Parliament empowered local councils to generate revenue by taxing visitors through the Visitor Levy (Scotland) Act, with Public Finance Minister Tom Arthur expressing belief that a tourist tax “can have positive impacts.”

Hotelier Sir Rocco Forte has called for a boycott of the levy, asserting in The Scotsman recently that it constitutes a “pernicious tax” atop existing taxes that could harm tourism, a vital part of the Scottish economy.

Forte additionally suggested that the tax in Edinburgh might prompt visitors to shorten their stay, tip less, and spend less at local retailers.

‘Deeply Disappointing’

The Scottish Conservatives have condemned the move, stating on a social media platform X on Friday: “Tourism businesses in Scotland are already facing significant tax burdens.

“It’s disheartening that the Labour-led Edinburgh Council has opted to burden visitors, small businesses, and Edinburgh’s local economy with this detrimental tourist tax.”

Scottish Parliament Member Sue Webber recently highlighted that the tourism tax will impact not just overseas or UK visitors, but also Scots visiting their capital.

In a post on X, the Scottish Conservative remarked: “The reality of Edinburgh’s ‘tourist tax’: If you live in West Lothian – you’re a tourist. If you live in East Lothian – you’re a tourist. If you live in Fife – you’re a tourist. Scots living outside the City of Edinburgh council boundary will all be tourists in their own capital city!”

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