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UKHospitality Scotland is urging the City of Edinburgh Council to delay the start of a planned transition period for collecting levy funds from May to at least October this year.
The current proposals would implement a transition period from 1 May 2025 where businesses would have to collect levy funds for bookings made for 24 July 2026, onwards, which is when the scheme would come into force.
The Visitor Levy Act, which was passed by the Scottish Parliament in May 2024 and received Royal Assent shortly after in July, grants local councils the authority to implement a tax on overnight accommodation, commonly referred to as a “visitor levy” or “tourist tax”.
Ahead of City of Edinburgh Council voting today [24 January] on the proposed Visitor Levy, UKHospitality Scotland warned that many businesses, and the booking partners they use, will not be ready to start collecting levy funds from May this year.
Edinburgh is positioned to become the first UK city to implement such a levy, following discussions by the City of Edinburgh Council’s policy and sustainability committee in August 2024.
The council aims to introduce a 5% surcharge on overnight stays, capped at seven consecutive nights.
If agreed, Edinburgh’s Visitor Levy charge will start being applied to bookings made on and after 1 May 2025 to stay in overnight accommodation in the city on and after 24 July 2026, representing a significant step forward in securing a new funding stream for the city.
Once established, the levy is expected to raise up to £50m a year.
Leon Thompson, executive director of UKHospitality Scotland, said: “A Visitor Levy in Edinburgh will bring huge changes to the city, its visitors and the accommodation businesses that have to administer and collect the levy. It will also impact the capital’s competitiveness as a destination for tourists.
“Accommodation businesses are undoubtedly going to face significant burdens and additional cost as they implement new systems to deal with the levy. I’ve been pleased that the Council has so far recognised that through the business support measures they have included.”
Thompson added: “In this final vote, I would urge them to go one step further and delay the date at which businesses have to collect levy funds to at least October this year. Asking already stretched businesses to begin collecting funds in May, just three months’ time, when the scheme will only be finalised this week, just isn’t feasible for many.
“I hope the council will once again act on concerns from businesses in this final vote, as well as from the wider sector who would like to see more of the money raised from the levy used to boost the visitor economy.”
