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Inclusions and exclusions as Visitor Levy Bill passes stage 2

Publication: The Orkney News


Which visitors to Orkney should be paying a locally administered tax for staying here and which visitors shouldn’t? That’s what was up for discussion at the Scottish Parliament’s Local Government, Housing and Planning Committee on Tuesday 12 March.

The Visitor Levy Bill has passed stage 1 and stage 2 in the Scottish Parliament where it was being scrutinised by MSPs of all parties at committee stage. It is at this point that amendments can be introduced.

You can read more about the Bill here.

What to exclude and include

There were many amendments put forward for discussion. There was also consideration given to the input from COSLA, the organisation which represents all of Scotland’s Local Authorities. Key to the use of the Visitor Levy was having local flexibility built into the legislation stated COSLA. It is local councils who will be administering the Visitor Levy and the money raised will be spent in local communities.

Campsites and Cruise Ships

MSPs discussed the possibility of removing camping sites and caravan parks from the bill, and of including cruise ships.

The point was made that camping sites cater for lower budget travellers and this would penalise them unfairly stated Miles Briggs MSP (Lothian, Conservative). With boat moorings and berthings, Stuart McMillan MSP (Greenock and Inverclyde, SNP) said that concerns had been raised to him from the recreational boating community. He added:

large cruise liner in Kirkwall Bay with a flock of birds rising up in the field in the foreground
Image credit Kenny Armet

“As a berthing is primarily a safe haven for a vessel, which is a very different scenario from staying in a room or in a hotel. A number of folk said to me that marinas, berthings and moorings are really just car parks for vessels.

“Many recreational boaters use their boat to travel to a mooring, then leave their boat and perhaps stay in a local bed and breakfast for the night. Applying a visitor levy to that berth does not seem to be the right approach. There are also many difficulties with collecting and remitting the levy, given that many moorings are run by small voluntary community groups and sometimes no formal record is made of who has used the berth.”

Liam McArthur, Orkney Constituency MSP, LibDem, stated that there should be local flexibility built into the bill. He raised the issue of cruise ships and motorhomes being included. COSLA was also very clear that they wished powers to be included for a Cruise Ship Levy.

On Cruise Ships Liam McArthur said:

“At a local level, in places such as Orkney, where cruise traffic brings in a significant proportion of the tourist visitors who come to the area each year, there is a risk that, without being able to apply the levy to cruise traffic passengers, the viability of the levy will not be sustainable because the revenues that are raised otherwise would not allow the administration of the levy to wash its face.”

And he added:

“I know that there are issues of competence in relation to applying the levy to cruise traffic. I am grateful to the minister for the engagement that I have had with him in recent weeks. I know that discussions are on-going with local authorities through COSLA on how they get around the issue, but I thought it important at this stage in the scrutiny of the bill at least to allow a debate to take place so that the minister could put commitments and assurances on the record, and to allow colleagues who have similar concerns or issues in relation to their own parts of the country to put those on the record. “

The convener of the committee is Ariane Burgess, Scottish Green Party MSP for Highlands and Islands. She set forth the Green’s view in support of a Cruise Ship Levy. The thorny issue of campervans and motorhomes was discussed. As the bill stands, those vehicles would be included in a visitor levy if they were in an official campsite but not if they were parked up overnight in some other location. Ariane Burgess said that simply adding motorhomes to the bill was unworkable.

Profile pic of Tom Arthur

Tom Arthur is the Scottish Government Minister for Community Wealth and Public Finance. He said that all those amendments related to the term “overnight accommodation”, which is a broad term.

“That approach allows a local authority to decide, after the consultation that it must carry out on whether to introduce a visitor levy, whether there are any types of accommodation that it would wish to exclude from that levy.”

On camping and caravan sites he still wanted them included in the bill. On the question of boat moorings and berthings, however, he said:

“There has been consensus from local government, the tourism industry and the committee on the matter. Therefore, the Government supports the amendment, which will remove moorings and berthings from the types of accommodation that the bill covers.”

And on cruise ships there was some compromise suggested. Tom Arthur explained:

“On a cruise ship levy, the Government’s position, as we announced in October, is that we will seek to give local authorities the power to create such a levy. Therefore, we have been working with the Convention of Scottish Local Authorities and local government to scope out the work that is needed on a levy and to assist them with developing a formal proposal for it.

“On Friday last week, COSLA wrote to the Government setting out its formal proposals for a cruise ship levy. In line with the new deal for business, we have committed to a public consultation on such a levy once proposals have reached a suitable stage of development to hear the views of all relevant stakeholders.

“If policy work and a consultation can be completed in time and Parliament agrees, we will seek to amend the Visitor Levy (Scotland) Bill to include a cruise ship levy. If that is not possible, we will explore other ways of passing the required legislation. I do not want to delay this important bill by waiting for that policy and consultation work to be undertaken, but neither do I want to rush work on a cruise ship levy to meet the bill’s timescales.”

Many feel that it is quite extraordinary that cruise ships were not included in the original bill because now that has created a whole host of problems. If there is not enough time to include this sector in the bill then it would require additional new legislation brought in to cover cruise ships on their own.

The craggy inlet with high cliffs behind and the beach at Durness
Camper vans parked along the cliff top coastline of Sutherland

Camper vans and motorhomes, Liam McArthur has suggested, could be paying the visitor levy to Orkney when they book their ferry passage. Of course, that would leave out mainland authorities, but it is a possibility. Islands have further opportunities of flexibility when it comes to cruise ships. Tom Arthur said that he was:

“Happy to have exploratory discussions on provisions for a cruise ship levy and a motorhome levy. I caveat that by saying that it is important that what we have in place is robust and that there are no undue burdens around administration and compliance that would, ultimately, undermine the policy intent. In that space, there is an opportunity for further discussion.”

As a consequence of these assurances, Miles Briggs withdrew his amendment on caravans and campsites; Stuart McMillan moved his amendment on the berthing of recreational boats; and Liam McArthur withdrew both his amendments on cruise ships and motorhomes.

Further Amendments

There then followed several amendments, some of which would deprive local authorities of flexibility in how the visitor levy was administered, which was a key recommendation from COSLA.

Pam Gosal MSP who represents the West Scotland (Con) wanted exemptions to the visitor levy for very small accommodation businesses – i.e. ones below the VAT threshold.

VAT is a tax controlled by the UK Government. The Minister reminded MSPs that “any local authority that is thinking of introducing a visitor levy will need to consider the potential VAT implications for relevant businesses in its area…. a local authority, when creating a visitor levy scheme, could choose to create an exemption from the scheme for businesses that are near the VAT threshold.”

There was also discussion on how the money produced by a visitor levy would be spent and if there should be a flat rate charged or a percentage.

The Scottish Government favours a percentage charge – “that any visitor levy will be proportional to the amount that someone has chosen to spend on their accommodation.”

People who would be exempt from the visitor levy

Conservative MSP Miles Briggs listed a series of people he wanted exempt from the visitor levy if they had to stay overnight somewhere other than their own home, for medical appointments for example.

These might be: parents who are staying in a hotel while their children are in hospital; people visiting family members in prison; and medical support workers.

The Minister pointed out local authorities will have the power to list the exemptions to the visitor levy to allow for these situations.

Money raised from the visitor levy will be used in local areas for  facilities and services with a strong connection to the tourism sector. The finer points about how these are spent will be decided by each local authority who have to consult local communities, tourism businesses and local tourist organisations before making those decisions.

It was also agreed that VisitScotland would produce guidance on the visitor levy which could also be updated as the need arose.

Click on this link for the Visitor Levy (Scotland) Bill and amended at Stage 2.

The Bill is now at Stage 3. MSPs can still propose amendments to the Bill.

You can download a copy of COSLA’a briefing here.

Brown Concrete Building

Next: The Visitor Levy: How it works in other cities

by Anna MacQueen, Scottish Beacon