3.1 Within Government
3.1.1 A range of Directorates across the Scottish Government have fed into the general policy development for the visitor levy. The BRIA has been developed with input and feedback from the following divisions within the Scottish Government: Local Government and Analytical Services Division, Tourism and Hospitality Division, the Economic Strategy Division of the Office of the Chief Economic Adviser and the Income Tax and Reserved Taxes Unit.
3.2 Public Consultation
3.2.1 Recognising that a discretionary visitor levy required careful consideration, between November 2018 and January 2019 the Scottish Government facilitated a National Discussion on a Transient Visitor Tax in Scotland to seek views and build a common and shared understanding of the issues, opportunities and challenges.
3.2.2 A discussion document - 'Transient Visitor Taxes in Scotland' - was published to inform this and six roundtable events held across Scotland. These events illustrated potential opportunities and challenges associated with tourist taxes, complexities around design and operation and also opposition to these proposals from representatives of Scotland's tourism industry. A summary of messages from the National Discussion was published in March 2019, along with the written evidence received. In particular, it drew out areas of difference between stakeholders, including with regard to views on the degree of national consistency and local discretion that would be desirable in a Scottish context.
3.2.3 The evidence from the National Discussion informed the development of the Scottish Government's proposals around a discretionary visitor levy which were then subject to a separate formal consultation.
3.2.4 A Consultation on the Principles of a Local Discretionary Transient Visitor Levy was published on 9 September 2019 to develop an understanding of the technical issues around the scope and form of a future visitor levy in Scotland and inform the development of legislation. The consultation ran for a 12-week period until 2 December 2019. During the consultation period, 14 information sessions were held across the country. These provided attendees with the opportunity to find out further information about the consultation from officials, and to discuss some of the issues raised in the consultation. Officials encouraged attendees to submit a formal consultation response. These events were held in Edinburgh, Glasgow, Aberdeen, Inverness, Skye, Dumfries, Mull and Shetland.
3.2.5 The consultation document posed 33 questions which invited views on a range of issues around enabling local authorities to apply a visitor levy, including: the balance between local autonomy and national consistency; the activities that a visitor levy will apply to; the basis of charge; the rate of charge; exemptions; and administration and compliance.
3.2.6 A total of 1,701 responses were received to the consultation exercise. Of these, 1,202 were based on a Living Rent-related campaign and did not address any of the questions set out within the consultation directly. Of the 499 substantive responses, 224 were from groups or organisations and 275 responses were from individuals. The two largest groups of organisational respondents were accommodation providers, with 49 responses from hotels and 67 responses from other accommodation providers (including B&Bs, guest houses, caravan parks and campsites).
3.2.7 The consultation process was valuable, and the Scottish Government is grateful to all who contributed their time, input and assistance to the process. The majority of respondents gave permission for their response to be published and these can be accessed through the Scottish Government Consultation Hub. An independent analysis of all the consultation responses was undertaken by Craigforth, and their report is available on the Scottish Government's website.
3.2.8 The following gives a brief summary of the key findings from the consultation which informed the content of the Visitor Levy Bill.
- A visitor levy set out mostly at the local level with some overarching national principles was supported by 42% of respondents to the consultation. Only 36% supported a wholly national framework and 22% supporting a hybrid option. A common theme raised by respondents was that any approach needed to offer enough flexibility for the differing requirements of each local authority area to be considered.
- A levy based on a percentage of the total accommodation charge was preferred by the largest proportion of those responding to this question in the consultation as opposed to a flat fee model (per room per night or per person per night). The reasons given most frequently in support of a percentage basis of charge were that the percentage charge was fair or progressive given it is related to the ability of visitors to pay and those choosing to use more expensive accommodation would also pay more tax.
- A percentage charge was also suggested to be well understood, and to be a method of calculation that is widely used elsewhere. Other points made in favour of a percentage charge included that it would reflect seasonal and geographical variations in accommodation prices and therefore be less distortive.
- The majority of respondents felt the tax rate for a visitor levy should be set out in a national framework. It was further emphasised that decisions of local authorities should be based on robust evidence, potentially backed by independent economic impact assessments to inform the decision on an appropriate rate.
- The consultation paper suggested that there are some groups for whom it would be unacceptable to impose a visitor levy under any circumstances. 78% of those answering the relevant question thought that all exemptions should be the same across Scotland.
- The need for any remittance system to be set up in consultation with the industry and for this to involve accommodation providers of all types was suggested by respondents irrespective of their view on whether providers should be ultimately responsible for collection and remittance of a levy
- A majority of respondents, 73% of those answering the relevant question, thought revenues from a visitor levy should be allocated to priorities articulated through local tourism strategies, where they exist.
3.3.1 A number of businesses and business representative organisations participated in and contributed to the Scottish Government's National Discussion in 2018, both by attending round table discussions and providing written contributions. The evidence gathered and issues raised during the National Discussion process have informed the development of this BRIA.
3.3.2 This BRIA is also informed by business responses to the public consultation. Business responses to the consultation included 116 accommodation providers, 7 business organisations, 12 heritage and cultural organisations and 10 tourism and hospitality industry representative organisations.
3.3.3 In keeping with the specific requirements of the BRIA guidance, Scottish Government researchers also conducted 20 face-to-face interviews in 2019 with individual businesses from the overnight accommodation sector. These businesses were identified through engagement with the Association of Scottish Self Caterers, the Federation of Small Businesses, and UK Hospitality. We have also interviewed representatives of other sectors potentially affected by a visitor levy including Hostelling Scotland, and the Caravan and Motorhome Club. These discussions were focussed on improving the Scottish Government's understanding of the business compliance challenges which a visitor levy will present accommodation providers with, as well as other related concerns.
3.3.4 Following the pause in the legislation being brought forward due to the pandemic, a follow-up survey was issued to these businesses with a particular focus on understanding the compliance challenges associated with the specific proposals in the Visitor Levy Bill and to provide an evidence base to make reasonable assumptions to quantify the likely impacts on a range of different accommodation businesses of a visitor levy. More detail of the engagement is provided in section 6 of this BRIA.
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