Financial Impact of the Highland Council Visitor Levy on
Skye and Lochalsh Accommodation Providers

The Highland Council is planning to implement a Visitor Levy on overnight accommodation stays, as outlined in the “Guidance on the Visitor Levy for local authorities” document recently released in early October 2024. This guidance, based on legislation passed by the Scottish Parliament, explains how local authorities can implement a percentage-based levy on overnight accommodation. As representatives of the local accommodation sector, we need your input to understand how this levy could affect our community’s businesses.

A useful link to the Highland Council Visitor Levy Bill Summary. 

Why Your Participation is Crucial:

• Provide real-world data on potential financial impacts
• Help create an evidence-based response to the upcoming Highland Council consultation
• Ensure the voice of Skye and Lochalsh’s tourism sector is heard
• Influence decisions that will affect your business and our local economy

Your participation in this survey will help:

1. Assess the financial viability of different levy percentages for local businesses
2. Understand the potential impact on VAT thresholds
3. Gauge effects on pricing and competitiveness
4. Evaluate administrative burdens on accommodation providers

Key points to be aware of from the guidance document:

• “Any amount charged by an accommodation provider for the visitor levy will be included in their turnover, which is used to determine if they need to register for VAT. It is at the discretion of the local authority to include or exclude businesses that fall below the VAT threshold from a VL scheme.”
• “As set out in the Act, a VL scheme will come into force at least 18 months after the date on which the local authority publishes a report, summarising the consultation responses received, and stating that it intends to proceed with the original proposal or a significant modification to a proposal. This is the implementation period.”
• “Under the Act, the accommodation portion refers only to the amount of the chargeable transaction that is attributable to the provision of the overnight accommodation.”
• “Where a cancellation happens on a booking that is pre-paid in advance, the business should refund the levy to the visitor and not remit it back to the local authority.”
• “A high proportion of accommodation businesses in Scotland are small and operated by sole traders (a “natural person”) as opposed to an established legal entity such as a Limited Company (a “legal person”). As such, certain items of information which might usually be processed by a local authority in the normal course of operations which would be treated as “business data” could actually be considered as “personal data” in the context of Article 4 (1) of the GDPR.”
• “Point of sales systems and property management systems will need to be modified to calculate and display the tax.”

• “There may be cases where a visitor who attempts to purchase overnight accommodation refuses to pay the visitor levy… In this scenario, the accommodation provider would remain the liable person, and could choose to cancel the booking or absorb the cost of the visitor levy.”

This 5-minute survey is anonymous and your responses will be invaluable in representing our local interests. Thank you for taking the time to shape the future of tourism in Skye and Lochalsh.