The Scottish Government has announced plans to amend the Visitor Levy (Scotland) Act 2024, introducing greater flexibility for councils to tailor local tourist tax schemes.
Under the new proposals, due to be brought before Parliament in early 2026, local authorities will have the option to apply a fixed-rate charge on overnight stays – an alternative to the current percentage-based model linked to accommodation costs.
The planned Visitor Levy (Amendment) (Scotland) Bill will also allow councils to set varied fixed charges based on geography, seasonality or accommodation type. Further clarification will be introduced on how levies should be applied to bookings made via third-party platforms, and what information must be shared by accommodation providers with local authorities.
Public Finance Minister Ivan McKee said the new Bill is a direct response to feedback from industry partners, “The visitor levy empowers councils by giving them a new way to raise money for investment in tourist services and facilities. Our aim has been to give councils the flexibility to design a levy that works for their areas, while ensuring businesses can easily understand what it means for them.
“The Act passed last year was an example of partnership working between the Scottish Government, local government and tourism businesses. Through regular discussions with our partners, it became clear that further flexibility would be welcomed. That is why we have decided to legislate next year, to ensure local visitor levies work effectively for everyone.”
If passed, the new Bill will give councils the choice between a percentage-based model or a fixed amount, with discretion to charge either per person per night or per night per room. Subject to parliamentary scheduling, the legislation is expected to pass during the current session.
Industry response has been broadly positive, particularly from bodies that have lobbied for a simpler, more transparent model.
Marc Crothall MBE, Chief Executive of the Scottish Tourism Alliance (STA), said, “Following constructive talks with the Minister for Public Finance, Scottish Government officials and cross-party politicians over the past year, the STA is heartened that they have listened to our calls to introduce the option of a simpler, fixed-fee visitor levy charge.
“It shows the Scottish Government’s willingness to act on feedback from business to ensure we have a visitor levy in place that is fit-for-purpose. It will overall be easier and less costly for accommodation providers and local authorities to administer, and importantly more transparent for our visitors.
“We now look forward to working constructively in partnership with the Scottish Government to deliver meaningful reform of the visitor levy charging model, which we have championed from the very start.
“In the meantime, we urge all local authorities to consider pausing any plans for a visitor levy scheme as this plays out in the Scottish Parliament over the next few months. Change is coming just down the line.”
Leon Thompson, Executive Director of UKHospitality Scotland, said, “UKHospitality Scotland highlighted at the outset that a flat rate charge would be simpler, easier to administer and less costly to business, than a percentage.
“Given the current legislation is unworkable, we welcome that the Scottish Government is being pragmatic in working with industry to address the challenges.
“Today’s announcement is a key step towards fixing the problematic existing legislation and we look forward to engaging with the Scottish Government, opposition parties and councils on the proposed changes.
“While these changes are positive, we remain opposed to the introduction of charges on guests and visitors.
“At a time when the country desperately needs economic growth, making holidaying and visiting Scotland more expensive through tax is counter intuitive and I would encourage local authorities to consider the impacts of a levy carefully.”
Fiona Campbell MBE, Chief Executive of the Association of Scotland’s Self-Caterers and Vice Chair of the STA Policy Group, added, “We welcome the announcement of the Expedited Visitor Levy Bill.
“It provides an innovative and pragmatic mechanism for reforming Scotland’s visitor levy, increasing local flexibility and demonstrating clear cross-party recognition that urgent change is required.”
