Transient visitor levy: consultation

Views sought on the principles of a local discretionary transient visitor levy or tourist tax.

1. Introduction and Background

Tourism is one of Scotland's most important industries, helping to create wealth and jobs and build upon our strong international reputation.

In 2018, there were over 15.3 million overnight visits to Scotland consisting of 11.8 million domestic visitors (from within UK) and over 3.5 million overseas visitors.  There were also just under 138 million day visits within Scotland in 2018.  While overall visitor numbers are similar to those seen earlier in the decade, there were around 1.2 million more overseas visitors to Scotland than in 2011.  Evidence and data on how many visitors Scotland received during 2018, where and what they visited and if they stayed overnight, in what type of accommodation they stayed is set out in Annex A.  

There has also been significant growth in both overnight and day visitors in specific parts of Scotland, such as Edinburgh and some parts of the Highlands.  This means that in some areas, there are greater pressures on the local environment and on activities that maintain and enhance the tourist experience. 

These local pressures led to a number of our local authority partners, as well as the Convention of Scottish Local Authorities, calling, in the course of 2018, for the Scottish Government to create the powers to allow them to apply a ‘tourist tax’, should it be appropriate for local circumstances.  This reflected not just the local pressures associated with sustained high numbers of visitors, but also the wider policy context of promoting greater local decision making together with the prevalence of such taxes in other countries.  This latter point is demonstrated in Annex B which provides an overview of the visitor taxes operating across Europe, including the rate of VAT that is currently levied. 

These proposals from local government prompted significant opposition from representatives of Scotland’s tourism sector who were concerned that such a levy could have negative impacts on individual accommodation and supply chain businesses and on the competitiveness of the wider tourism sector across Scotland.  In support of this position the sector identified rising wages, input costs and existing taxes, particularly VAT on accommodation, which is charged on holiday accommodation at the standard rate of 20 per cent. This rate is higher than in most EU countries. 

A Note on Terminology

The proposal to provide local authorities with the power to apply a tax or levy on visitors is variously referred to as a local transient visitor levy, a tourist tax or a combination of similar terms.  In this consultation document, we will use the term “visitor levy”.  Later in this consultation, we seek views on the choice of name.

1.1. The National Discussion

Recognising these circumstances, the Scottish Government engaged with a range of partners and stakeholders from the tourism industry, local authorities and the wider business community in Scotland in a National Discussion on a transient visitor tax.  This sought to bring partners together to ensure a full range of voices were heard and to participate in discussions on this complex national issue.  It aimed to build a common and shared understanding of the opportunities and challenges in this area.

The National Discussion, which included six roundtable events across Scotland, each chaired by a Scottish Government Minister, ran between 23 November 2018 and 25 January 2019, and supporting evidence was published in a discussion document[2].  Following its closure, the Scottish Government published a summary of the messages heard and readouts of the individual roundtables[3], along with the written contributions received from individuals, tourism sector representatives, business organisations, local authorities, and others[4].

Overall, the National Discussion has provided a substantial evidence base, illustrating potential opportunities and challenges associated with tourist taxes and drawing out a number of important issues and concerns.  This evidence has informed the development of the Scottish Government’s proposals around a discretionary local visitor levy, which will be explored through this consultation. 

1.2. Towards a Discretionary Visitor Levy 

As part of the agreement of the 2019-20 Draft Budget[5], the Scottish Government committed to consult on the principles of a visitor levy and introduce legislation this parliamentary term to permit local authorities to introduce such a levy if they consider it appropriate.  This commitment was part of a package of measures focussing on local tax reforms and local fiscal empowerment.  Our intention is therefore to provide this power to local authorities by an Act of the Scottish Parliament that creates a local tax to fund local authority expenditure.

Our aim is that decisions about the application of the visitor levy should be for individual local authorities to make, and receipts raised must be used to fund local authority expenditure.  Additionally, the National Discussion clearly indicated that funds raised from a visitor levy in an area should be spent on activities related to tourism in that same area. 

1.3. This Consultation

This consultation seeks to develop our understanding of the issues and concerns highlighted during the National Discussion and help inform the development of legislation to enable local authorities to apply a visitor levy.  In particular, the consultation seeks views to ensure that the legislation:

  • supports the continuing success of the tourism industry in Scotland;
  • provides the powers that are needed for local authorities to respond to local pressures;
  • minimises the administrative and compliance burdens for those affected.

The subsequent chapters of this document build on the evidence gathered from the National Discussion, setting out considerations relating to particular aspects of establishing a visitor levy alongside questions relevant to each section.  The full set of questions are also available at Annex C together with a copy of the response form which is also available at

The consultation will run until midnight on 2 December 2019 after which no responses can be considered.  Further information about how to respond to the consultation and how your responses will be handled can be found at Annex D.



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