Visitor Levy (Scotland) Bill: island communities impact assessment

An island communities impact assessment (ICIA) considering the potential impact of the introduction of the Visitor Levy (Scotland) Bill on island communities.

Step Three – Consultation

Who do you need to consult with?

Local authorities, businesses and communities.

How will you carry out your consultation and in what timescales?

A public consultation on the Principles of A Local Discretionary Transient Visitor Levy[6] opened on 9 September 2019. It ran for a 12 week period, closing on 2 December 2019. The consultation invited views on the principles for enabling local authorities to choose to apply a levy on visitors staying overnight. It also invited views on the balance between national consistency and local autonomy, as well as a number of other related issues.

This pre-legislation consultation provided an opportunity to engage with and hear the views of island communities about the proposals for a transient visitor levy (or tourist tax). A total of 1701 responses to the consultation were submitted, although 1,202 of these related to a campaign on rent and did not answer the consultation questions. The 499 substantive responses included responses from:

  • local authorities incorporating island communities;
  • organisations from islands communities or representing islands interests; and
  • responses from individuals living on islands.

Consultation responses from organisations based on, or involved with, the Scottish islands provide an indication of island interests and views. These ranged from individual accommodation providers to local authorities and representative bodies. An independent analysis of all consultation responses was published in March 2020, along with individual responses where permission was given to do so[7].

A series of public information sessions were held during the consultation period providing an opportunity for anyone with an interest to share views and discuss the proposals. Six of the 15 sessions were held on the islands of Mull, Skye, Orkney and Shetland.

These responses and insights received from this process have informed the key findings and conclusions in this assessment.

What questions will you ask when considering how to address island realities?

For our engagement sessions with island communities, we asked questions on the following issues:

  • Local discretion and community involvement
  • Use of funds
  • Impact on island tourism
  • Exemptions
  • Inclusion of cruise ships

What information has already been gathered through consultations and what concerns have been raised previously by island communities?

The following information is taken from our engagement sessions with island authorities in 2019.

Orkney Islands, 20 November 2019 – 13 attendees including councillors, local authority officials, destination organisations, community council representatives and accommodation providers. The following issues were raised:

  • Exemptions – islanders should be exempt from any levy.
  • Administration – a VL on overnight stays may be too great a burden to collect from some businesses.
  • Use of revenues – the local government settlement could be compromised if the fiscal power was created but not applied in Orkney.

Shetland Islands, 20 November 2019 – 9 attendees over two sessions including accommodation providers, port authority, individuals, amenity trust. The following issues were raised:

  • Island proofing – the cost of travel to islands is already high without an additional levy being applied. Suggested there could be other ways to raise revenue for tourism investment as visitors to islands can be more easily identified due to limited means of access (cruise ships, ferries or flights).
  • Visitor activity – a VL scheme should be simple enough to allow for different patterns that reflect the seasonality of tourism on the islands.
  • Basis of the charge – a percentage of accommodation costs would be the most straightforward approach as it avoids additional reporting requirements.
  • Exemptions – island residents In particular have to stay in overnight accommodation to access medical treatment, or if transport is disrupted (which may also affect workers to the islands). Concerns on applying a VL to medical professionals sent to an island, or residents having to travel to events or competitions (for example, sports teams.)
  • Revenues – how much could be raised by a levy and how this would be used.
  • Impact on competition – it was suggested, although there was not agreement on this, that the application of a VL could impact on visitor numbers and competition between local authorities. If cruise ships were considered as part of a VL, then there was a risk that ships may stop visiting if they have to pay a VL on top of port fees.

Isle of Skye, 12 November 2019 – 11 attending over two sessions including business, destination management organisation, accommodation providers, industry representatives, individuals and media. The following issues were raised:

  • Local circumstances – the majority of visitors to Skye are day visitors and the proposals should recognise this. It was also stated that there had been a change in visitor patterns (shorter stays and more day visitors). A large proportion of GDP in Skye comes from tourism, although it is seasonal.
  • Local democracy – important that decisions around a visitor levy involve business and community interests to reflect local circumstances.
  • Administration – costs to accommodation providers (particularly for small businesses) for additional record keeping, VAT, credit card and booking platform charges. Additional cost implications will affect micro-businesses in particular.
  • Revenues – stressed the importance of revenues being spent in the local area. Local business and communities must have a say in how these are spent.
  • Rates – suggested that a national rate was necessary to ensure fairness across Scotland and to avoid the risk of hospitality businesses investing in parts of the country where there is no levy or a low levy.

Isle of Mull, 30 October 2019 – 16 attendees including business and business representatives, HIE, local authority, community and individuals. The following issues were raised:

  • Revenues – Importance of ring-fencing the money, although there were concerns over how the council might use the income. Participatory budgeting should be applied.
  • Basis of the charge – it was suggested that for islands such as Mull, it would be preferable to charge a levy to visitors via the ferry operator, though not all were in agreement on this. The Bill should not preclude such alternative means of collection, or the application of the levy more widely (for example, including day visitors and campervans.)
  • Exemptions – suggested exemptions for locals and for Scottish nationals, notably for those persons staying overnight in other regions for medical purposes or because of transport issues such as ferry disruption.
  • VAT – concerns over how the levy would interact with VAT requirements.
  • Islands impact – it was considered important that proposals be assessed for the impact on the islands.

Is your consultation robust and meaningful and sufficient to comply with the Section 7 duty?




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