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What It Does
This bill gives Scottish local councils the discretionary power to introduce a levy (commonly called a 'tourist tax') on overnight accommodation stays within their area.
It creates the legal framework for councils to design, implement, collect, and spend the revenue from such a levy, with proceeds ring-fenced for purposes related to the local visitor economy and infrastructure. The bill passed the Scottish Parliament and received Royal Assent on 20 May 2024, becoming the Visitor Levy (Scotland) Act 2024.
Grants individual Scottish local authorities (councils) the power — but not the obligation — to introduce a visitor levy in their area
Levy applies to paid overnight accommodation including hotels, B&Bs, self-catering properties, campsites, and similar establishments
Accommodation operators are responsible for collecting the levy from guests and remitting it to the local council
Councils must consult with local communities, tourism businesses, and other stakeholders before introducing a levy
Revenue raised must be spent on purposes relating to the promotion or support of the local visitor economy, or related infrastructure
Councils must publish an annual report accounting for how levy revenue has been collected and spent
A mandatory 18-month notice period applies before any levy can come into force, giving businesses time to prepare
Scottish Ministers retain a power to issue guidance to councils on the operation of the levy
Certain accommodation categories may be exempt, and councils have some discretion over rate-setting and structure
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Who Benefits
Scottish local councils — gain a new discretionary revenue stream to fund tourism infrastructure without drawing on general council budgets
Local communities in high-tourism areas (e.g., Edinburgh, Highland, islands) — levy proceeds must be reinvested locally in visitor-related services and infrastructure
Scottish tourism businesses collectively — if revenue funds infrastructure improvements (transport, waste, public spaces) that improve the visitor experience
Residents of tourist-heavy areas — reduced pressure on local services caused by visitor numbers, funded by visitors themselves rather than council tax payers
Scottish Government — aligns Scotland with common international practice (e.g., Amsterdam, Barcelona, Paris, Venice) without imposing a national tax
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Who Gets Hurt
Accommodation operators — take on new administrative and compliance burdens as unpaid tax collectors; small operators (B&Bs, independent guesthouses) face proportionally higher compliance costs
Tourists and visitors to Scotland — pay more for overnight stays, directly bearing the cost of the levy
Budget travellers and lower-income visitors — a flat or per-night levy is regressive, hitting those spending less on accommodation harder in relative terms
Scotland's price competitiveness — adds cost compared to destinations without such levies, potentially deterring some visitors, particularly at the budget end
Self-catering and short-term let platforms (e.g., Airbnb hosts) — brought into compliance and collection obligations they may not have faced previously
Rural and remote accommodation businesses — may face the same levy burden but with fewer resources to absorb compliance costs than large urban hotel chains
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Hidden Riders
Ring-fencing requirement is broadly worded — 'promotion or support of the visitor economy' is a wide definition that councils could interpret expansively, potentially funding things only tangentially related to visitors
18-month notice period was added during parliamentary scrutiny — appears straightforward but effectively means no council can implement a levy before late 2025 at the earliest, delaying revenue to local areas
No cap or floor set on the levy rate in primary legislation — the rate is left entirely to each council's discretion, creating a risk of significant variation or a race-to-the-top between councils
Scottish Ministers' guidance power (rather than regulations) is soft — guidance is not legally binding, meaning councils could diverge substantially from any national framework without legal consequence
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Framing Analysis
Framed as giving councils 'local flexibility and control' — accurate in that the levy is discretionary, but the administrative and political complexity means smaller or less tourism-dependent councils are unlikely to use the power at all, in practice concentrating its use in a handful of major destinations
Described as making 'visitors contribute to the communities they visit' — fair framing, but the bill does not guarantee additionality; councils could theoretically reduce existing tourism-related spending and use levy revenue to replace it rather than supplement it
Presented as aligning Scotland with international best practice — broadly accurate, many European cities do levy tourist taxes, though the comparison often cited (Edinburgh vs. Amsterdam) involves cities with very different tourism profiles and levy rates
Framed as business-friendly due to the 18-month notice period — the consultation and notice requirements do provide meaningful preparation time, so this claim is reasonably supported
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Red Flags
⚑No national rate or rate cap in primary legislation — each council sets its own rate, risking confusion for visitors and operators who travel across council boundaries, and no parliamentary check on how high rates could go
⚑'Visitor economy' spending definition is vague — without a statutory definition of what qualifies, accountability for how levy revenue is actually spent depends entirely on annual reports, which carry no enforcement mechanism if funds are misused
⚑Compliance burden falls on operators, not platforms — the bill places collection duties on accommodation providers, but enforcement against non-compliant operators (particularly short-term let hosts) depends on councils having sufficient capacity to audit and pursue them, which many councils currently lack
⚑No equalization mechanism — a levy in Edinburgh could raise substantial revenue while a levy in a smaller authority raises very little; there is no provision to share revenue between councils or address disparities
⚑Interaction with short-term let licensing regime — Scotland already has a separate short-term let licensing scheme; the bill adds another layer of obligation for the same operators, increasing cumulative regulatory burden without a consolidated compliance framework
⚑Annual reporting is the only accountability mechanism — there is no independent audit requirement, no minimum spend standards, and no penalty specified if a council fails to publish its report or spends revenue outside permitted purposes
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Current Status
The Visitor Levy (Scotland) Bill passed the Scottish Parliament and received Royal Assent on 20 May 2024, becoming the Visitor Levy (Scotland) Act 2024.
The Act is now law, but due to the mandatory 18-month notice period required before any levy can be introduced, no levy can come into force before late 2025 at the earliest. Individual councils must still decide whether to introduce a levy and complete their own consultation processes before doing so.
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