Tourism chiefs are demanding an urgent overhaul of Scotland’s “unworkable” Visitor Levy, warning the current percentage-based system is “operationally impossible” and risks throwing councils and businesses into chaos.
The Scottish Tourism Alliance (STA) and the Association of Scotland’s Self-Caterers (ASSC), backed by a broad coalition of industry bodies, are calling for an Expedited Visitor Levy (Scotland) Reform Bill to replace the percentage model with a simple, flat per-night charge – a system already used in cities such as Barcelona, Vienna and Amsterdam, and soon to be introduced in Wales.
Post-legislative analysis has exposed major flaws in the current model. It forces operators to remove meals or cleaning fees before applying the levy – something that online platforms like Booking.com and Expedia say they cannot do. It creates double taxation, with businesses paying VAT on money they do not keep. It imposes heavy administrative burdens on small and seasonal operators. And it breaches UK consumer law by failing to show guests a clear final price at booking.
Without reform, industry leaders warn the levy will lead to inconsistent application, non-compliance and possible legal challenge.
The proposed Expedited Visitor Levy (Scotland) Reform Bill would replace the percentage system with a flat nightly rate per person, make guests – not businesses – the liable party, introduce digital collection systems to simplify the process, and allow councils to set caps on chargeable nights.
The plan has broad political and industry backing and meets the Scottish Parliament’s test for an Expedited Bill – sudden, urgent and important.
With the SNP Party Conference taking place in Aberdeen, industry leaders say this is the moment for genuine partnership between government and business to deliver a fair, future-proof system.
Marc Crothall MBE, CEO of the Scottish Tourism Alliance, said, “The current Visitor Levy framework is a disaster waiting to happen. It is not a question of political principle but of operational reality. Although the industry has for many years been against the principle of a levy, largely due to concerns over staying price competitive, it has accepted the bill passed through government and acknowledges the fiscal challenges of local authorities.”
“It also accepts the idea of a fair levy that, if used as intended to help grow tourism, enhance the visitor experience and in turn benefit local communities, it could be good in some destinations. That said, there must be an independent, detailed risk analysis and deep consultation with the industry and local communities before any final decision to apply it is taken.”
“It also requires just one charging application model that is workable for business and is legal, which the percentage model legislated for is not. The Scottish Government now has a golden opportunity to fix this before irreversible damage is done. The proposed Expedited Bill offers a pragmatic, evidence-led solution that protects businesses, gives certainty to councils, and keeps Scotland competitive as a world-class destination.”
Fiona Campbell MBE, CEO of the Association of Scotland’s Self-Caterers and Vice Chair of the STA Policy Working Group, commented, “Scotland’s tourism and hospitality businesses have worked in good faith to make this system work, but the evidence is now overwhelming: the percentage model cannot function in practice. A flat, per-night levy is not only simpler and fairer, it aligns with international best practice and consumer law. Ministers have shown openness to reform – now we need urgent action to deliver it. This is not retreat, but responsible reform that supports fairness, clarity, and sustainability.”
Tourism leaders say the government must act now – or risk breaking the system before it even begins.