Councils given power to charge 'flat fee' tourist tax

Scottish councils will be allowed to charge visitors a fixed sum for staying in their area under revised "tourist tax" legislation.

Currently, local authorities which have approved a visitor levy are able to roll out the charge as a percentage of the overall value of a stay.

The Visitor Levy (Amendment) (Scotland) Bill, passed at Holyrood on Tuesday, permits councils to replace that with a set rate.

However, the terms of the bill mean an 18-month "lead in" before schemes already put in place by local authorities can be switched.

The move was welcomed by Scottish tourism bodies, who described it as "easier and less costly for accommodation providers and local authorities to administer".

Public finance minister Ivan McKee said the switch gave councils "flexibility" over how the tax was implemented.

The rollout of the levy does not start until later this year.

In Edinburgh, visitors will be charged 5% of the overall cost of their visit for any stays after 24 July.

In Glasgow, the levy is due to come into force from January 2027, while in Aberdeen a 7% charge will be introduced in April 2027 at the earliest.

Stirling and West Dunbartonshire Councils have also agreed to introduce schemes in their respective areas on a percentage-based approach.

Under the current law, a stay in Edinburgh during the 2026 festival season, priced at £100, would come with an additional £5 charge.

The revised legislation means councils have the option to change that provision to a flat fee, regardless of the overall value of the stay.

However, as no Scottish council has brought the scheme into force yet, it would take 18 months for that change to be made.

In Edinburgh's case, if the switch was made now, that would mean it could not be changed until October 2027.

But if the scheme is already up and running, that changeover time is shortened to six months.

The bill also means accommodation providers will be allowed to keep a proportion of the visitor levy collected to help "mitigate possible administrative cost".

Local authorities will also be required to consider whether schemes should be revoked after a three-year review of the scheme.

An option of setting a fixed amount per person per night was proposed by the tourist sector at stage one of the amendment bill but was voted down at stage two.

Cosla, the local government watchdog, said it "strongly opposed" that decision and denied the approach was "unworkable".

A "medical exemption" – which ensured those travelling to another council area for medical purposes or procedures would not have to pay the charge – was also rejected.

McKee said: This legislation strengthens the visitor levy by giving councils the flexibility to choose the approach that best reflects their local area, empowers local decision making and ensures the benefits of tourism are shared across communities.

"Tourism is an important sector and we want visitors to have a positive experience as they share our culture, landscapes and hospitality.

"We have worked closely with councils and tourism bodies, and across parliament, and want to ensure visitor levies are an effective option for councils who choose to introduce them to boost investment in local economies and services."

Several councils, including Argyll and Bute, have delayed the introduction of their own visitor levy until after the vote took place.

Meanwhile, Orkney and Shetland both voted against a charge being brought in, however Orkney did not rule out another form of levy.

Marc Crothall, chief executive of the Scottish Tourism Alliance, said: "Through the fixed amount model, it will overall be easier and less costly for accommodation providers and local authorities to administer, and importantly more transparent for our visitors.

"Those councils seeking to progress a levy can now do so with an option that better safeguards Scotland's tourism sector, while simultaneously ensuring a sustainable revenue stream for visitor related infrastructure."

Fiona Campbell, chief executive of the Association of Scotland's Self-Caterers, added: "The inclusion of enhanced flexibility through the option of a fixed amount model is a crucial step forward in delivering a fair and practical system for Scotland's £1bn self-catering sector.

"It will allow those local councils who wish to introduce a levy to do so in a manner that best reflects local needs and circumstances."