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UK Hospitality Responds To Edinburgh Council Tourist Tax Survey

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UK Hospitality Responds To Edinburgh Council Tourist Tax Survey

UK Hospitality Responds To Edinburgh Council Tourist Tax Survey
January 09
18:46 2019

Willie Macleod, Executive Director, UK Hospitality

Willie MacLeod explains why the majority of accommodation businesses in the city (including hotels, serviced apartments, B&Bs, hostels and self-catering properties) are actually opposed to a TVL…

In the report, Edinburgh City Council fails to make clear that the survey response refers to 87 of the 170 accommodation businesses that responded to the council’s survey and represent respectively, four and eight percent of the city’s accommodation businesses. It would therefore be helpful if they could make clear exactly which types of accommodation businesses actually responded.

This is an important point to make; unlike the larger hotels and accommodation businesses, a significant number of smaller accommodation operators in the city make no contribution to public finances through business rates (being exempt under the Small Business Bonus Scheme) or VAT (as they trade below the annual turnover threshold of £85,000) and have less to lose if consumers are saddled with a further tax.

UK Hospitality (UKH) opposes the introduction of a TVL in Edinburgh – and for that matter anywhere in Scotland – primarily on the grounds of price-competitiveness. The UK is one of only three EU countries which do not apply a reduced rate of VAT to accommodation and tourism services and while it is true that many EU countries do impose some form of tourist or bed tax, this is implemented against a much lower rate of VAT.

Bad for business: UK Hospitality estimated that the annual negative economic impact arising from the imposition of a TVL at £2 per room, per night, could be between £44m – £94m in Edinburgh alone

To impose an additional tax on visitors to Edinburgh and Scotland is potentially damaging to tourism and fails equitably to compare the competitive position.

The fact is, visitors to this country are price-sensitive and it is naïve to assume that any additional tax will have no effect on visitor behaviour. Using proven academic studies of tourism price-sensitivity and data from a survey of visitors to Edinburgh conducted over Autumn 2018, we estimated that the annual negative economic impact which will arise from the imposition of a TVL at £2 per room, per night will be in the region of £175m – £200m in Scotland (£44m – £94m in Edinburgh alone). This is far greater than the amounts expected to be raised by a TVL.

The Scottish Government is in the midst of conducting a national discussion on TVL and has been clear that it has no plans for the introduction of any such tax on consumers (which will be payable by residents of Scotland as well as by visitors to the country). Instead of blithely pushing ahead with its proposals for the introduction and administration of a TVL, the City of Edinburgh Council would do well to await the outcome of the Government’s deliberations on the principle of such a tax.

Willie MacLeod is Executive Director of UK Hospitality.

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