Visitor Levy (Amendment) (Scotland) Bill: Fairer Scotland Duty Assessment

Title of policy, strategy or programme

Visitor Levy (Amendment) (Scotland) Bill

Summary of aims and expected outcomes of strategy, proposal, programme or policy

The Visitor Levy (Amendment) (Scotland) Bill seeks to make changes to an existing piece of legislation, the Visitor Levy (Scotland) Act 2024 (“the 2024 Act”) to give councils flexibility to set up a visitor levy scheme in their areas using a fixed amount (or amounts) model as an alternative to the current percentage-based model provided for in the 2024 Act.

Currently, councils can decide to introduce a percentage-based charge on overnight accommodation to support services and facilities that visitors use. The liable person is the accommodation provider, although it is anticipated that they may pass on the cost of the levy to the visitor. The Visitor Levy (Amendment) (Scotland) Bill would allow councils to decide to introduce a fixed amount of levy based on the number of nights of their stay or the number of people staying in the accommodation each night of the stay instead of a percentage-based model. This gives councils more flexibility over how they design a visitor levy scheme so that it meets the needs of their local area. The specific provisions of this Bill, in terms of providing councils with additional flexibility regarding the model of any visitor levy, are new. However, the provisions of the 2024 Act established the discretionary power for councils to introduce a visitor levy scheme should they choose to do so. This Bill also makes some changes to the 2024 Act to clarify some technical points regarding different booking models that came to light once councils started to implement visitor levy schemes in their areas and ensures that the 2024 Act works as intended.

It is up to each council to decide whether they want to introduce a visitor levy scheme or not. If a council decides they want to introduce one, they must make sure that any decisions they take about the scheme consider the impacts on those from lower socioeconomic groups in their area and beyond. The 2024 Act also gave councils the power to introduce local exemptions for different groups of people if they decide that is a good thing to do.

The decision to introduce a new piece of legislation to make changes to the 2024 Act was informed by engagement with councils, tourism businesses and organisations that represent tourism businesses. The Scottish Government has also drawn on findings from extensive consultation and engagement undertaken in advance of the 2024 Act.

Summary of evidence

This Fairer Scotland Duty Assessment draws on evidence gathered to inform the 2024 Act and associated impact assessments.

The Fairer Scotland Duty Assessment published alongside the 2024 Act found that, in broad terms, visitors to Scotland (from other parts of Scotland and the UK) are predominantly from better off socioeconomic groups. There is no equivalent data regarding international visitors. Therefore, those from better off socioeconomic groups are more likely to be affected from any increased cost incurred through staying overnight in an area where a visitor levy scheme is introduced and costs of the levy are passed on to the visitor, regardless of which model of scheme is in operation.

A fixed amount (or amounts) model – which would be enabled by the provisions of the Visitor Levy (Amendment) (Scotland) Bill – has the potential to be either progressive or regressive where costs of the levy are passed on to the visitor depending entirely on where the Local Authority decides to set the levy rates. A single flat rate would be regressive, but where the local authority decided to set higher rates for more expensive accommodation and lower rates for cheaper accommodation the model could be progressive.

The introduction of any visitor levy scheme, whether a percentage-based model or fixed amount (or amounts) model, will potentially increase the costs faced by visitors to purchase accommodation in some areas. This could have an impact on visitor demand for accommodation which could, in turn, impact people from lower socioeconomic groups who are more likely to be employed in sectors with a relatively high dependence on visitor spending. However, as noted in the Fairer Scotland Duty Assessment published alongside the 2024 Act, tourism demand is affected by a wide range of factors and the relationship between a visitor levy and the effect it has on tourism demand is not clear.

Summary of assessment findings

The Scottish Government recognises the potential negative impacts of a fixed amount (or amounts) model on those from lower socioeconomic groups and has identified the following routes to mitigate this potential impact.

Firstly, the Visitor Levy (Amendment) (Scotland) Bill does not mandate councils to introduce a particular model of visitor levy. Instead, it provides councils that choose to introduce a visitor levy with more flexibility over how they design a scheme so that it meets the needs of their local area. If a council decides that they want to introduce a visitor levy, they must undertake their own impact assessments that take into account local circumstances.

Secondly, councils that choose to introduce a visitor levy – whether a percentage-based model or a fixed amount (or amounts) model – must take into account all potential impacts and implement relevant mitigations, including exemptions where required. A council could also choose to introduce different rates for different types of accommodation to ensure that the levy charged to those purchasing lower-cost accommodation is less than that charged to those purchasing higher-cost accommodation. This may help to mitigate any potential negative impact on those from lower socioeconomic groups. Further, the 2024 Act also gives Scottish Ministers the power to introduce national exemptions should they choose to do so.

Thirdly, the Visitor Levy (Amendment) (Scotland) Bill does not seek to change the provisions made in the 2024 Act that was drafted in a way that defines eligible overnight accommodation as a room, space or other accommodation at a type of premises that is provided for residential purposes otherwise than as the individual’s only or usual place of residence. The 2024 Act excludes from the definition of overnight accommodation a local authority or registered social landlord gypsy traveller site. The wording in the 2024 Act regarding “only or usual place of residence” means that overnight accommodation provided to individuals who, for example are homeless or at risk of homelessness, experiencing domestic abuse or refugees and asylum seekers would not be subject to the levy, as this would be considered to be their place of residence.

Conclusion

The Scottish Government has determined that while there is a potential negative impact of a fixed amount (or amounts) model on those from lower socioeconomic groups, this can be mitigated as set out above. Further, the majority of visitors to Scotland (from other parts of Scotland and the UK) are predominantly from better off socioeconomic groups and, as such, it is these groups that are more likely to be affected by any visitor levy scheme in operation, whether a percentage-based model or a fixed amount (or amounts) model.

Sign off

Name: Catriona MacKean

Job title: Deputy Director, Local Government

Date: 19 December 2025