Visitor Levy must work for small businesses in Strathspey, says business body
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Small accommodation providers' questions about the proposed Visitor Levy – also known as a 'tourist tax' – must be carefully considered as the legislation is developed.
This is the view of the Federation of Small Businesses (FSB) in response to the Scottish Government's controversial plans which would give local authorities the power to introduce a levy to be charge on overnight stays in some types of accommodation. The Highland Council has welcomed the idea of a visitor levy.
Responding to the Scottish Parliament’s Local Government, Housing and Planning Committee consultation on the Visitor Levy (Scotland) Bill, the small business representative organisation noted that respondents to its recent Big Small Business Survey within Scotland as a whole were relatively evenly split on the introduction of the Levy. However, the response also notes that they were particularly anxious about any further increase in administrative costs.
FSB Scotland’s Highlands and Islands development manager, David Richardson, said: “Our recent Big Small Business Survey found that while 20 per cent of the 212 Highlands and Islands businesses of all types that responded to this question supported the introduction of a local visitor levy, 45 per cent did not and 35 per cent were unsure. And that’s surely the point. In discussing these proposals with our members, we found a range of opinions, as well as a level of uncertainty over exactly what is being proposed by some aspects of the Bill. There is a lack of detail on exactly how exemptions to the scheme will work, for example.
“Administration of any levy is obviously a key concern for smaller operators. Get this wrong and it will create further burdens for accommodation providers, who are already grappling with everything from staff shortages, to rising costs to, in some cases, the impending short-term lets licensing scheme.
“Government has committed to reducing the cumulative regulatory burden as part of its New Deal for Business, so it’s crucial the Visitor Levy is implemented in a way which reflects this commitment – and that means really listening to small providers at every stage.
“Unfortunately, the Business and Regulatory Impact Assessment (BRIA) which accompanies the Visitor Levy Bill only included input from two businesses whose turnover falls below the current VAT threshold.
“This is important because, as has been confirmed by government, charges paid under any levy scheme will be subject to VAT. One of the key concerns we’re hearing from small operators is that adding these charges to customers’ bills may push them over the VAT threshold, thus incurring significant extra cost and administration. As a result, some might well scale back their operations to keep below the threshold, and that would be bad for fragile local Highland economies and communities.
“Our members have also been clear on the need to be meaningfully included in local authority decision-making around where revenue raised from any levy will be spent, and we trust that Highland Council will do just that. Our recent survey showed that the majority of small businesses want to see this invested in local infrastructure and facilities, which will boost the attractiveness of their area to tourists, while improving the overall environment for everyone. However, this spend must be in addition to existing budgets and not merely displace them so that they can be spent elsewhere.”
