A NORTH COAST 500 TAX 

 

 

Edinburgh is about to become the first city in the UK to introduce a tourism tax, but there are still considerations to be made as the council determines exactly what implementation of the tax will look like.

What impact that will have on other areas of Scotland is yet to be seen.

 

 

The introduction of the tax remains a controversial topic. An Edinburgh Chamber of Commerce survey showed that 70% of businesses would support the introduction of a tax. However, on the other side, the Scottish Tourism Alliance said further conversation and debate on the issue was needed before any decision was made.

While tourism taxes are common across the EU, the UK hospitality industry remains strongly opposed to introducing such a tax on the basis that it’s not competitive, and that the UK already levies one of the highest rates of VAT on tourism services in the EU.

The Highland Council has also announced that a tourism tax is up for consultation after seeing an influx in tourism to the region, with almost 6.5 million visitors to the area last year. The tourism tax proposed by the Highland Council could raise between £5m to £10m per year.

 

 

These real examples are forcing local councils across the UK to consider the impact of what a tourism tax could mean for their local area as the sector continues to grow, and what key factors they would need to contemplate if it was to be introduced.

As a starting point, local councils need to provide clarity on how the funds raised from the tax will be used as well as consider how the funding will complement the support that is already provided through central Government.

For example, the Rural Tourism Infrastructure Fund by the Scottish Government will see £6m invested over the next two years to support tourist facilities and communities in rural Scotland. The Fund was developed in part to support increased tourism in the Highlands as a result of the North Coast 500 route. The Highland Council should therefore consider if the additional tourist tax is a necessity, or if it will deter tourists to other parts of Scotland that are not taxed.

 

But what ever the out come, people like the Highland Council are going to have to find away of raising these monies for infrastructure as we assume locals are the last to be willing to be taxed higher to pay for the huge influx of Tourists

 

Tourism taxes have become common in many parts of the EU and can be seen as a way for cities to raise funds that support their growing tourism industry.

 

But it will be important for councils across the UK to ensure the taxes they propose maintain their competitiveness in the market, and they will need to provide clarity to stakeholders on how the funds will be used in order to gather support and ensure an open debate ahead of any sort of successful implementation.