I’m not saying the summer’s been a bit of a wash-out, but if you want to buy a practically unused patio set and barbeque give me a shout.
Thankfully, no one holidays in Scotland if they don’t like unpredictable weather. And the evidence of your own eyes tells you, even if official “summer” was over before it started, the holiday season is still going strong. Just walk through our city centres, or drive the beautiful roads of the Highlands. I was in London on business the other week and, while the streets were as tourist-thronged as you’d expect, they were nothing compared with Edinburgh mid-Festival.
That’s a good thing. We all know what a vital role tourism plays in the Scottish economy, generating £4.5bn a year and supporting more than 200,000 jobs.
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Sure, the huge number of people who choose to holiday in Scotland can create some issues in specific places at particular times, but that pales into insignificance compared to the enormous benefits it brings, not least in jobs and taxes generated.
And those taxes will soon go up as a result of the visitor levy or “tourist tax”, which the Scottish Government has given local authorities the power to introduce.
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First in Scotland will be in the capital, where the city council is forging ahead with plans to introduce a 5% levy on overnight stays within two years. Other areas are likely to follow, with the Highlands, Glasgow and Aberdeen all expressing interest.
As we know from our own travels, visitor levies are now common throughout Europe and further afield. That doesn’t mean, however, that any schemes in Scotland will just automatically work. Unless we get their design and implementation right, there could be significant issues for certain sectors.
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And that design and implementation needs to take full account of what the accommodation sector actually looks like. It’s not all huge international hotel chains and ex-Presidentially-owned golf estates. It’s dominated by small, independent hotels, B&Bs, guesthouses and operators of short-term lets. The Scottish Government’s own impact assessment of the visitor levy states 93% of registered enterprises in the accommodation sector are small operators. And there are further providers on top of that who are not registered for VAT or PAYE, all of whom will, by definition, be at the micro end of the spectrum.
The new charge does throw the spotlight on the high level of taxes already levied on our hospitality industry - some of the highest in Europe - before adding in the visitor levy. The Scottish Government argues the levy is a tax paid by tourists rather than businesses. However, the reality is some operators are likely to attempt to swallow at least part of the extra charge themselves, dropping the part of the accommodation fee they retain, in order to stay competitive in a tough market.
Then there is the question of how the tax raised, estimated to be up to £50 million a year in Edinburgh alone, will be spent.
One of the main principles on which the tax was introduced - and a key reason it was accepted by many businesses - was the promise that the industry responsible for generating those funds would help decide what’s done with them. But, while it’s overwhelmingly small businesses that will collect and administer the levy, there’s no guarantee they’ll play any part in that decision-making.
Just look at the visitor levy forum proposed by the council to advise on spending plans in Edinburgh. There are places for a community councils representative; one for the young people of the city; the Edinburgh Hotels Association, mainly representing the larger accommodation providers; the umbrella organisation, the Edinburgh Tourism Action Group; and festivals and heritage organisations. That’s all fair enough. But there is currently no room for smaller accommodation providers. When they are the very businesses who will be responsible for making the scheme a success, this seems odd.
Getting things right in Edinburgh is particularly important because it’s likely to be used as something of a template when the levy is rolled out elsewhere. Also, no one wants to see a repeat of the battle lines thrown up by the introduction of short-term let regulations.
Thankfully, there is still plenty of time to tweak and test these plans before the first charges are collected. These schemes must work smoothly and fairly for the smaller operators who are key to the future of one of Scotland’s great business success stories.
Colin Borland is director of devolved nations for the Federation of Small Businesses
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