Innovation and Efficiency

07.02.19

Edinburgh Council becomes first UK authority to introduce ‘tourist tax’

Councillors at Edinburgh City Council voted today to approve the first ever UK ‘tourist tax’ which will raise an estimated £14.6m annually.

The Transient Visitor Levy (TVL) scheme will include a flat £2 per-night room charge added to the price of a room in all properties for the first seven days of stay.

Although Edinburgh are the first local authority in the UK to introduce such a scheme, the new tax will not come into effect until after the Scottish Parliament has passed the enabling legislation, with the council now recommending the proposals to ministers and MSPs.

This follows the decision by the Scottish Government last week to give councils the powers to raise taxes by 4.79% without the requirement of holding a local referendum – up from 2.99% - as well as the introduction of a new workplace parking tax.

The decision came as the government met to decide the core local government settlement which will see an extra £90m for councils in Scotland and authorities shift to setting budgets for three years ahead.

One MSP called it the “most significant empowerment of local authorities since devolution” whilst another called it a “triple tax bombshell,” and the deal has paved the way for Edinburgh to announce the first TVL scheme in the UK.

It will apply to all paid-for accommodation, including Airbnbs, hotels, hostels, B&Bs and other short-term lets with only visitors staying in campsites being exempt.

The TVL will aim to raise finances to pay for the cost of mass tourism in the Scottish capital and other services and is estimated to bring in between £11.6m and £14.6m per year to Edinburgh.

However, it is not thought that parliament will pass the legislation enabling the levy to come into effect until next year.

MSP and finance secretary Derek Mackay originally set out the plans in December, and said he wanted to ensure local councils received a fair funding settlement despite further cuts from the UK government.

But a Tory finance spokesperson criticised the Scottish Government’s decision to pass the deal, claiming that Mackay and Nicola Sturgeon had “torn up promises.”

Image credit - Jane BarlowPA WirePA Images

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