Friday January 24th 2025
Written by Local Democracy Reporter, Marie Sharp
Edinburgh’s tourist trade has been given an extra six months to prepare for the introduction of a tourist tax after it was approved by councillors today.
City of Edinburgh councillors backed the new 5% visitors levy, which will be the first introduced in Scotland, at a meeting this afternoon.
But they also approved a call to extend a transition period for businesses to prepare to introduce the new charges which will now come into effect on bookings made from October 1.
Tenants union Living Rent had called for a higher tax to be introduced and more money raised from it to be invested in affordable housing in the city.
They told the meeting that it was time to reverse a situation in the city where “homeless people live in hotels and homes are used by tourists”.
The SNP had argued that raising the tax to 7% could raise up to £1billion to invest in housing over the next 30 years.
The Greens wanted to go further raising it to 8% but the council’s Conservative group called for a lower visitors levy arguing that the addition of VAT had not been taken into account.
Council leader Jane Meagher said the visitors levy had been at the heart of the Labour group’s plans for well over a decade.
She said: “Tourism is at the heart of Edinburgh’s success as a city however it inevitably puts strains on resources and if we want to develop the tourism in the city we need the means to sustain it.”
The Labour administration motion, approved by council majority, today extended it by six months.
The council’s Lib-Dem group leader said his party might not agree with some of the details of the Labour plans for the levy but recognised it was coming describing it as a “momentous day”.
SNP councillor Simita Kumar, who brought their motion for a higher levy, accused the administration of a ‘dereliction of leadership’.
And fellow SNP councillor Euan Hyslop said the lower levy rate ‘lacked ambition’.
He said: “This city is nothing without its workers. It is ironic we are taking part in today’s meeting from our homes while people working in the hospitality industry cannot afford their accommodation.
“It is 14 months since this council declared a housing emergency and we are about to turn our back on an opportunity to tackle it. That is really disappointing.”
Independent Councillor Ross McKenzie accused the administration of keeping the levy “low enough to let the Tories support them”.
He said: “They have made a political choice and the choice they are making betrays the people they were elected to represent.”
The Labour administration motion for a 5% levy to be introduced to bookings from October 1 was approved by 34 votes to 28.
After the meeting The Association of Scotland’s Self-Caterers (ASSC) told Midlothian View that a badly implemented tourist tax will do more harm than good
Fiona Campbell, CEO of the ASSC, said:
“We are extremely disappointed that Edinburgh Council has failed to properly appreciate the widespread concerns of our sector who are the ones responsible for administering this tax.
“While the transition period will be altered by a few months, there remains very clear operational impossibilities. In the rush to be first, rather than getting it right from the get-go, their slapdash approach risks undermining the levy before it has even started. Edinburgh will be a guinea pig for this new tax and hopefully other councils will now take stock and learn from the mistakes made.
“While tourist levies are common in other destinations, Edinburgh’s plans make it an outlier. First, it is a tax on a tax: the 5% levy itself is subject to 20% VAT, something unheard of in Europe. Other destinations have a reduced rate of VAT on tourism services, where Scotland does not. Those demanding a levy of 8% or more need a reality check.
“Second, this is not an ‘international’ visitor levy paid only by foreign tourists with exemptions for residents, but one applicable to ordinary Scots staying overnight in the capital, those who have already made a financial contribution to local services. And as with all taxes, the only way is up, especially when councils are starved of funds.
“Finally, the credibility of those continuing to blame the tourism industry for all manner of ills, especially the relatively small number of short-term lets, is wearing thin. The housing crisis won’t be solved by causing a crisis in Scottish tourism; and those seeking to respond to the Housing Emergency should focus their ire on the capital remaining an empty homes hotspot.
“We understand the rationale behind a visitor levy but a badly implemented policy will do more harm than good, damaging the very industry it is supposedly meant to support.”
Tweet Share on Facebook
