By Simon McLoud
As Edinburgh City Councillors celebrated the introduction of their landmark tax. There were many who expressed concern with the initiative. Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, represented the other side of the argument when she 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.
Any form of Tax will have those who oppose it and given that Councils have numerous schemes designed to impose unwanted costs on consumers like the now notorious LEZ Schemes, it is of little wonder that there are many dissenting voices.
Fiona added: “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.”
Leon Thompson, Executive Director of UKHospitality Scotland, commented on the new tax and the Councils’ action, saying: “Not only has Edinburgh’s visitor levy been confirmed, but so too has the hit to the city’s competitiveness as a leading tourist destination.
“Our fundamental concern has always been that this levy will only serve to make visitors trips to Edinburgh more expensive, ultimately reducing their spending in the wider visitor economy and deterring future visits.
“It’s now the job of the Council to use these funds wisely to improve the capital’s attractiveness as a visitor destination and mitigate the impact of the levy on businesses.
“I am pleased that throughout the process the Council has listened closely to and acted on UKHospitality Scotland’s concerns, and those of our industry partners, through the introduction of business support measures and the change to the scheme today to delay when businesses will have to collect levy funds.
Whilst there would seem to be a strong lobby of opposition to the new tax, it would seem unlikely that this will change the decision. Perhaps only the consumer could do that, with the power to choose other more economic destinations. But it would seem likely that this possibility has been factored into the tax grab.