Business group raises ‘serious doubts’ over Highland tourist tax

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Taxing tourists in the Highlands is ‘not the answer’, according to the Federation of Small Businesses (FSB).

The comments come after Highland Council launched a major public consultation on the possibility of introducing a Transient Visitor Levy – often referred to as a ‘tourist tax’ – which could generate an extra £5million to £10m each year, depending on how the scheme is designed.

The Highlands welcomes more than six million tourists per year and many residents feel visitors should contribute to the maintenance of the public services and infrastructure.

However, the FSB has expressed doubts about introducing a tourist tax due to growing pressures on Highland businesses, such as increases in business running cost, squeezed margins, difficulty in employing staff and Brexit uncertainty. The business campaign group said that it has ‘serious doubts’ about the advisability of introducing a new tax on visitors.

‘While fully accepting that Highland infrastructure needs more investment, FSB argues that taxing visitors in uncertain times is not the answer,’ the group stated.

FSB Highlands and Islands area leader, Tanja Lister, is encouraging all Highland businesses, who depend directly or indirectly on tourism, to take part in the council’s consultation.

‘Our research over the past three years shows that a substantial majority of businesses are against a new visitor tax for a whole variety of reasons, not least the impact that it could have on their customers and their businesses,’ she said.

‘It’s now for Highland Council to explain to the local business community why it believes that such a levy would be good for business and our local economy.  In particular, businesses will want to know why a new tax on their customers, with the accompanying administrative burden, is preferable to alternative approaches.’

Running until autumn 2019, the main consultation consists of two components: an online questionnaire aimed at residents and tourism businesses and targeted face-to-face questionnaires with visitors at locations across Highland. The council has stressed that no decision has been reached on the matter other than to conduct a public consultation.

‘Highland welcomes visitors numbering roughly 25 times our resident population every year,’ said Lochaber councillor Allan Henderson, chairman of the Environment Development and Infrastructure Committee. ‘While visitors are very welcome, some of Highland’s infrastructure and services are struggling under the pressure of these additional users.

‘Ultimately, the Council, with the help of everyone who responds to the Consultation, needs to decide what is better for our region: introducing a Visitor Levy, with its potential positive and negative impacts? – Or not implementing a Visitor Levy, avoiding potential negative impacts but limiting possible investment and therefore leaving the region with the problems we currently face.’

Council leader, councillor Margaret Davidson, also said that the Transient Visitor Levy is just one option the council is considering to raise money in order to ‘manage the challenges tourism is both facing and contributing to in Highland’.

The Scottish Government has committed to introducing legislation by 2021 that would allow local authorities in Scotland to implement a Transient Visitor Levy.

The Highland Council have published a  ten minute online survey which will be open until October 20 with results forming part of a council report in December 2019.