Documentation and correspondence on Visitor Levy: FOI release

Information requested

FIRST

All documents relating to the question and view taken by the Scottish Government as to whether the Visitor Levy as proposed to be raised and collected by Local Councils, under the Visitor Levy (Scotland) Act 2024 is taxable income in the hands of the business subject to the levy, (namely the “accommodation provider”); including all submissions and advice notes to Ministers in the Scottish Government and all internal emails between the Scottish Government and its officials and those of other public bodies thereanent, including both Visit Scotland and the HMRC and Revenue Scotland; as well as with COSLA.

SECOND

And second, all documents relating to whether the Visitor Levy is subject to VAT, and if so to whom the VAT on the levy is payable ( i.e. whether that is the Local authority of HMRC and Revenue Scotland directly) and in each case, whether and by whom the refund of VAT would be made, if at all.

And in particular all documents in which consideration is given as to whether the Levy is subject to VAT as determined whether it, the VAT is detailed separately on the invoices issued to their customer, or simply included in the total charge without being specifically detailed thereon.

Response

1. Before addressing the specific details of your FOI request, I would first like to outline some general points for context. The principles and application of VAT, which are central to your request, pertain to reserved matters. Generally, VAT is charged on the price paid on the supply of taxable goods or services, including other taxes, levies and charges. In the case of the visitor levy, if an accommodation provider includes an amount equivalent to a visitor levy in the charge for the overnight accommodation, then this will form part of what is paid under a contract for the supply of accommodation. This portion will therefore have a VAT liability, as part of the accommodation. Detailed questions about the VAT implications of the visitor levy should be raised with HMRC given it is a reserved issue.

2. I enclose a copy of some of the information you requested. However, in this instance we are unable to provide some of the information you have requested because there is an exemption for legal advice under section 36(1) of FOISA. The reasons why that exemption applies is due to the confidentiality of legal advice, and because disclosure would breach legal professional privilege. This exemption is subject to the ‘public interest test’. Taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is some public interest in release as part of open and transparent government, and to inform public debate. However, this is outweighed by the strong public interest in maintaining the right to confidentiality of communications between legal advisers and policy officials, to ensure that Ministers and officials are able to receive legal advice in confidence, like any other public or private organisation.

3. Furthermore, some of the information pertaining to reserved VAT policy is held in confidence from UK Government. Advice may be shared in confidence between the UK Government and the Scottish Government; for the purposes of FOISA, where the information is received in confidence from a department of the UK Government it is not considered to be held by the Scottish Government. This is set out within section 3(2)(a)(ii) of FOISA. As such we are unable to provide this information because the Scottish Government do not hold that information. You may wish to submit a new request under the Freedom of Information Act 2000 (FOIA) to The Financial Secretary to the Treasury, Lord Livermore at contactholmember@parliament.uk who should be able to help you further.

4. Scottish Government has previously responded to questions from parliamentary committee on the application of VAT to the visitor levy, you can find a copy of that correspondence on the Scottish Parliament website (https://www.parliament.scot/-/media/files/committees/local gov/correspondence/2023/visitorlevybill1september.pdf). This correspondence confirms the Visitor Levy will form part of the turnover of accommodation providers for VAT registration purposes. Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. If, however, you do not have internet access to obtain this information from the website(s) listed, then please contact me again and I will send you a paper copy.

5. An exemption under section 38(1)(b) of FOISA (personal information) applies to some of the information you have requested. This exemption is not subject to the ‘public interest test’, so we are not required to consider if the public interest in disclosing the information outweighs the public interest in applying the exemption.

6. An exemption under section 30(b)(i) of FOISA (free and frank provision of advice) applies to some of the information requested. This exemption applies because disclosure would, or would be likely to, inhibit substantially the free and frank provision of advice. This exemption recognises the need for officials to have a private space within which to provide free and frank advice to Ministers before the Scottish Government reaches a settled public view. Disclosing the content of free and frank advice on the VAT and the Visitor Levy will substantially inhibit the provision of such advice in the future. This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate. However, there is a greater public interest in allowing a private space within which officials can provide full and frank advice to Ministers as part of the process of exploring and refining the Government’s position on the Visitor Levy and VAT. This private thinking space is essential to enable options to be properly considered, based on the best available advice, so that good decisions can be taken. Premature disclosure is likely to undermine the full and frank discussion of issues between Ministers and officials, which in turn will undermine the quality of the decision making process, which would not be in the public interest.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at https://www.gov.scot/foi-responses.

FOI 202500456480 - Information Released - Annex

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