[Scottish Parliament, 14.10.2024] Local tourism businesses risk being hit twice if new “tourist tax” powers are implemented by local authorities across the Highlands and Islands.
Highlands and Islands MSP Jamie Halcro Johnston has warned that the Scottish Government's new Visitor Levy itself incurs VAT, meaning that tourism operators will effectively be taxed on the new tax.
This has been confirmed to the Scottish Conservative MSP by the independent Scottish Parliament Information Centre (SPICE), and Mr Halcro Johnston raised the issue with Scottish Finance Secretary Shona Robison in Parliament last week.
Mr Halcro Johnston said:
“We have warned all along that this a flawed policy which, as well as simply shifting the tax-raising burden from central government onto local councils, will also see tourism businesses forced to become tax collectors.
“What is worse is that, because of the way this policy has been pushed through by ministers in Edinburgh, the Visitor Levy will also incur VAT, meaning the “tourist tax” will, itself, be taxed.
“That only further increases the amount that will need to be paid, and risks pushing many smaller businesses over the VAT threshold with all the additional financial and regulatory implications that creates.
"These concerns were raised with me when I met with a group of local tourism businesses in Fort William earlier this month, and it is no understatement to say that there is real alarm – and real anger - on the ground.
“I raised their concerns with the SNP’s Finance Secretary at Finance Committee last week but, while suggesting the impact of new legislation was always monitored, Shona Robison said she was not aware of the Scottish Government considering making any changes to the new law.
“Our local tourism and hospitality sector has, in the last few years, been forced to endure the impact of Covid, the botched Deposit Return Scheme, Short Term Lets Licensing, as well as the hoarding by SNP ministers of millions of pounds of funding meant for reducing business rates for the sector.
“Businesses are already facing rising costs and additional regulations, and this legislation only adds to their burden, forcing them to jump through even more hoops and pay for the privilege to do so.
“Once again, Scottish ministers in Edinburgh push through legislation with little consideration or care of the impact it will have on businesses in the Highlands and Islands”.
ENDS
Notes to Editors
- Jamie Halcro Johnston MSP’s speech in the Scottish Green Party Business: Budget Priorities 2024-25 debate in the Scottish Parliament: https://www.parliament.scot/chamber-and-committees/official-report/search-what-was-said-in-parliament/meeting-of-parliament-09-10-2024?meeting=16044&iob=137005#orscontributions_M5800E308P795C2621244
- Jamie Halcro Johnston MSP questioning the Finance Secretary during the Finance and Public Administration Committee meeting on 8 October 2024: https://www.parliament.scot/chamber-and-committees/official-report/search-what-was-said-in-parliament/meeting-of-parliament-08-10-2024?meeting=16043&iob=136968#orscontributions_M5800E308P795C2620457
- Jamie Halcro Johnston MSP discussing VAT on visitor levy with local councillors during the Finance and Public Administration Committee meeting on 1 October 2024: https://www.parliament.scot/chamber-and-committees/official-report/search-what-was-said-in-parliament/meeting-of-parliament-01-10-2024?meeting=16034&iob=136930#orscontributions_M5800E308P795C2619227
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