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With the tourism industry in the Isles already dealing with short-term let licensing fees and proposals for a Calanais Stones entry charge, the Federation of Small Businesses is asking accommodation providers to pose questions about the Scottish Government’s proposed Visitor Levy.

Legislation is currently being developed to introduce a ‘tourist tax’, but the tourism industry across Scotland is evenly split on the idea. The proposed Bill will give local authorities the power to introduce, should they so wish, a levy to be charged on overnight stays in some types of accommodation.

But, speaking out after their Visitor Levy survey highlighted regional differences on the idea, Federation of Small Businesses (FSB) Scotland’s Highlands & Islands Development Manager, David Richardson, warned that there is anxiety about any further increase in administrative costs.

He commented: “Our recent Big Small Business Survey found that while 20% of the 212 Highlands & Islands businesses of all types that responded to this question supported the introduction of a local visitor levy, 45% did not and 35% were unsure. And that’s surely the point. 

“In discussing these proposals with our members, we found a range of opinions, as well as a level of uncertainty over exactly what is being proposed by some aspects of the Bill. There is a lack of detail on exactly how exemptions to the scheme will work, for example.”

The FSB representative said the administration of any levy is a key concern for smaller operators. 

“Get this wrong, and it will create further burdens for accommodation providers, who are already grappling with everything from staff shortages to rising costs to, in some cases, the impending short-term lets licensing scheme,” continued Richardson.
“Government has committed to reducing the cumulative regulatory burden as part of its New Deal for Business, so it’s crucial the Visitor Levy is implemented in a way which reflects this commitment – and that means really listening to small providers at every stage.”
He also pointed out that a Scottish Government impact assessment of the  Visitor Levy Bill only included input from two businesses whose turnover falls below the current VAT threshold. 

This was important because the government has already confirmed the Visitor Levy charges will be subject to VAT. Small operators are concerned that the levy added to customer bills may push them over the VAT threshold, thus incurring significant extra costs and admin. The FSB Scotland fear is that, as a result, some small operators may be tempted to scale back their operations to stay below the VAT threshold, negatively impacting already fragile local Highlands and Islands economies and communities.
Directing comments to Comhairle nan Eilean Siar, Richardson added:  “Our members have also been clear on the need to be meaningfully included in local authority decision-making around where revenue raised from any levy will be spent, and, should it go ahead with the Levy, we trust that the Comhairle will do just that. 

“Our recent survey showed that the majority of small businesses want to see this invested in local infrastructure and facilities, which will boost the attractiveness of their area to tourists while improving the overall environment for everyone. 

“However, this spend must be in addition to existing budgets and not merely displace them so that they can be spent elsewhere.”

The Comhairle’s Sustainable Development Committee will discuss the Visitor Levy on Tuesday (September 19), when they meet to consider a report on the Visitor Levy (Scotland) Bill from Depute Chief Executive Calum Iain Maciver.

Noting in his report that the levy represents a significant income stream for the islands to spend on tourism development and infrastructure maintenance, the Depute Chief Executive is recommending the Comhairle agrees to develop proposals and respond to national consultations on the proposed Visitor Levy (Scotland) Bill, through a unified collaborative approach with the Highlands and Islands Regional Economic Partnership.

The Bill states that the Local Tourism Levy will apply to the following types of accommodation:

  • hotels
  • hostels
  • guest houses
  • bed and breakfast accommodation
  • self-catering accommodation
  • camping sites
  • caravan parks
  • boat moorings or berthings
  • accommodation in a vehicle or on board a vessel, which is permanently or predominantly situated in one place
  • any other place at which a room or area is offered by the occupier for residential purposes other than as a visitor’s only or usual place of residence.

Mr Maciver notes that “a number of visitors may evade the levy, including campers/motorhome/ campervan users who do not use ‘paid-for’ camping sites and also the majority of cruise ship visitors. 

“With the imminent opening of the new Stornoway Deep Water Terminal, it is anticipated that the local cruise market will account for approximately one-third of all visitors to Lewis, and Stornoway in particular,” he adds.

As well as being an “instrumental partner” in the Highlands and Islands Regional Economic Partnership (REP), it is planned to engage Outer Hebrides Tourism and the accommodation sector and consult with them throughout the process. 

In his report, the Depute Chief Executive concludes: “The Visitor Levy has the potential to provide a guaranteed income for the development and preservation of the visitor and community infrastructure in the Outer Hebrides. Consultation with communities is not only compulsory but essential to ensure their views are taken into account when designing any proposed scheme. 

“Progressing the development of the Levy proposals and responses to governmental consultations through the REP would aim to promote a unified approach to the development of a simplified, integrated levy scheme throughout the Highlands and Islands, whilst ensuring that island-proofing is taken into account.”