What is a visitor levy?
A visitor levy is a charge paid by people using paid accommodation. In Scotland, this is a percentage charge. Revenue from the levy has to be invested locally on facilities and services that are for, or used by, tourists and visitors.
How much will it be?
There is no limit on how much the levy can be. Other local authorities such as the City of Edinburgh Council are proposing a 5% charge. Aberdeen City Council is proposing a 7% charge.
This has not yet been decided for Perth and Kinross, and your input into the Perth and Kinross Visitor Levy consultation will shape the decision.
The legislation says that the levy must be charged before VAT.
An example breakdown of costs is:
- accommodation cost: £100
- 5% visitor levy: £5
- total before VAT: £105
- total after VAT (20%): £126
Without the visitor levy, the total cost for this example would be £120 (accommodation cost plus VAT at 20%).
Using the same example costs, if a person is staying in accommodation that is not liable to pay VAT (meaning it earns below the VAT threshold), the total costs would be £105, made up of £100 accommodation cost plus 5% visitor levy.
Why can't it be a flat fee?
The legislation states that the visitor levy must be a percentage charge. This means we are not allowed to introduce a flat fee although we can place a 'cap' on the levy charged - usually by setting the number of nights that it would be charged for.
Who would pay the levy?
The legislation gives some groups of people automatic exemption from paying the levy. These include those who use overnight accommodation as their only or main residence (for reasons like homelessness, poor housing conditions, experiencing domestic abuse, or being an asylum seeker or refugee). It also includes people who are in receipt of the following:
- Disability living allowance
- Disability allowance
- Attendance allowance
- Pension age disability benefit
- Personal independence payment
All other exemptions are up to the local authority. These could include carers, Perth and Kinross residents who make a booking within the local authority area, or people visiting family in care homes or hospitals. The law also says the rate could be different for different trip purposes, which might include business or work, or visits for medical treatment.
This would require exempt visitors to provide proof of their exemption status to either their accommodation provider (who may not want to ask for sensitive information, and to whom visitors might not want to disclose sensitive information to) or to the local authority, which would require additional staff resource to process and handle. Other local authorities have decided not to include extra exemptions above those listed in the Act, because of concerns about administering them.
This has not yet been decided for Perth and Kinross, and your input into the consultation will shape the decision.
It is also up to the local authority to decide how exemptions should be managed. Other local authorities are offering reimbursement for those who are exempt as this means the accommodation provider does not need to ask for sensitive information or process exemptions.
Some of the arguments for and against local exemptions can be seen on pages 26 to 33 of the Scottish Parliament's summary of submissions to the Local Government, Housing and Planning Committee in relation to the Visitor Levy Bill.
When and where would the visitor levy apply?
The consultation asks people what geographic area they think any levy should apply to, and whether it should apply all year round or just for part of the year. Your feedback will inform these decisions.
VisitScotland has produced in-depth guidance on the visitor levy, and regularly updates its webpages with information about what is happening in local authorities around Scotland.
Summaries of responses to a national consultation that was held about visitor levies can be found on the Scottish Parliament webpages about the Bill under the 'Stage 1: general principles' section.
How will you make sure the funds are spent on what the scheme says they should be?
When accommodation providers remit money to the local authority, it has to go in a dedicated bank account specifically for the visitor levy. This means it does not go into our general budget, and that it remains ring-fenced.
The objectives for tourism in the area will be set out in the Perthshire Tourism Strategy and these will inform where the money is spent.
The law says that we have to establish a Visitor Levy Forum that acts as an advisory group on the operation of the visitor levy. This can be made up of people from many different organisations. The consultation asks who you think should sit on any Perth and Kinross forum.
How is the money collected and paid?
Accommodation providers will collect the levy when visitors book or pay for their booking. It is up to the authority and/or accommodation providers to decide whether to list the visitor levy as a separate line on visitors' bills (like VAT) or to include it within the room rate or tour price.
The Improvement Service (the national improvement organisation for Local Government in Scotland) is developing a national platform for accommodation providers to use to report and remit the levy to their local authority. When the accommodation provider needs to report their visitor levy income and remit proceeds to the Council, they will be able to use the platform to populate the relevant detail, and the platform will then calculate the amount due to the authority.
The frequency of reporting and collection is up to the local authority, and no decision has yet been made in relation to this for Perth and Kinross.
How will you support accommodation providers?
As part of the consultation, we are engaging directly with accommodation providers to find out what support they would like if the levy is introduced.
The Improvement Service is developing a national reporting platform to help accommodation providers submit returns to their local authority, so that there is a consistent approach across Scotland.
The local authority may also provide other types of support - for example, Glasgow City Council has proposed allowing accommodation providers to retain 1.5% of the levy funds that they collect to help with administrative costs, and the City of Edinburgh Council has proposed retaining 2% of the levy fund to mitigate costs for providers.
What are other Councils doing?
The City of Edinburgh Council has agreed to implement a 5% visitor levy on stays in the city with a 5-night cap. The levy will be enforced from July 2026. The money is expected to be spent on festivals and events, public infrastructure, and housing, which is a particular pressure in Edinburgh during the Fringe Festival.
Highland Council, Argyll and Bute, Glasgow City Council, and Stirling Council are all planning early consultations with stakeholders and the public on proposals for visitor levy. Falkirk Council and East Lothian Council are also currently running public engagement to shape potential schemes for their area.
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