Two-thirds of Scottish councils considering local visitor levy after roll out of Edinburgh scheme

Data compiled by the Federation of Small Businesses (FSB) in Scotland shows 21 out of 32 Scottish local authorities have been either discussing the idea or are actively pursuing plans to introduce a local levy.

The FSB research is based on local authorities’ public statements and briefings about a visitor levy.

FSB Scotland warned councils must work with small accommodation providers as they develop their plans.

Andrew McRae, FSB Scotland’s policy chair, said: “Small businesses will play a key role in implementing and operating any local visitor levies introduced across Scotland. Without the central IT and accounts of the big hotel chains, guesthouses and B&Bs will be disproportionately impacted.

“They have lots of unanswered questions at this stage about how these schemes will work. How will the national online portal that is being developed for processing the levy work? Will it be ready in time and user-friendly for guesthouse staff who need to use it?”

He added: “Some of our members have warmed towards the idea of the visitor levy. They see the value in some of the potential investment which has been outlined in local infrastructure and services for the good of visitors, residents and businesses alike.

“However, it would be wrong to assume just because there are ‘tourist taxes’ operating around the world that any scheme will automatically work effectively in a particular local authority area in Scotland.”

Under the Edinburgh scheme, visitors staying in the city will have to pay a 5 per cent fee per night from July 24, 2026, capped at five consecutive nights. The levy is expected to raise up to £50 million a year for the local authority.

The 5 per cent charge will apply to those staying in hotels, bed and breakfasts, and other forms of accommodation, including holiday lets.

Tourists, people staying for work or visiting the city for other reasons will be charged, including Scottish residents.

Mr McRae added: “We are keen to understand more about the particular concerns of small operators which is why the visitor levy is one of the key areas covered in our ongoing Big Small Business Survey. Previous survey findings showed concerns that revenue raised will go to covering holes in council budgets, instead of being invested in making areas more attractive to tourists. Directly involving small businesses in the decision-making process about where revenue is allocated is crucial to building their support and easing concerns.

“FSB Scotland has been working constructively with the city council in Edinburgh for a number of years, as it develops Scotland’s first visitor levy scheme, to help ensure small business concerns are heard and addressed. We stand ready to do the same in local authority areas across Scotland.”