Accounting association recommends 2.5% Scottish Tourism Tax

The Association of Accounting Technicians (AAT) has recommended that the Scottish government ignore calls for a flat rate Scottish Tourism Tax and instead introduce a tax of 2.5% on the overall accommodation cost instead.

The accountancy body has 1,800 members in Scotland including approximately 100 AAT Licensed Accountants who provide tax and accountancy services to around 10,000 small Scottish businesses, including many who let property commercially.

The AAT consultation response also stated that it opposes any plans to impose a tourism tax on day visitors, “…because of the destructive impact this has had on the tourism industry in several other countries and because of the complexity and administrative burden that this would require.”

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The AAT also stressed the need to set the tax at an “appropriate rate” to ensure it raises funds for sustainable tourism whilst not discouraging tourism as it has done in some other places such as the Balearics, where tourism tax was doubled after only two years of operation or in Amsterdam where a flat rate €8 charge introduced this year has led to a “steep fall” in visitor numbers.

AAT has also recommended that, “… the Scottish government give serious consideration to exempting all Scottish residents from a Scottish Tourist Tax,” as it would “ ensure domestic tourism is not discouraged, replicate what happens in many other countries and increase acceptability across the Scottish electorate.”

AAT surveyed its members in Scotland to help inform its response and found that they favoured third party platforms such as Airbnb being responsible for collecting and paying the tax, not just accommodation owners, to reduce bureaucracy. They also believe these tax payments should be paid quarterly to coincide with existing VAT payment requirements.

Finally, AAT stated that the name ‘visitor levy’ is not appropriate and should be changed.

Phil Hall, AAT head of public affairs and public policy, said: “A 2.5% charge would be much fairer than a flat rate fee and whilst it would mean a £2.60 a night charge on average in Edinburgh, it would amount to just £1.35 on average in Aberdeen.

“It’s not just fairer by region, it’s fairer for everyone when you consider the flat rate proposed by others would see those staying in a five-star hotel charged the same as those staying in a youth hostel – that simply isn’t fair or reasonable.”

Hall added: “It should be called exactly what it is, a ‘Scottish Tourism Tax’ because this helps aid transparency and understanding.

“Using the word ‘tourism’ also makes a clear link between the tax and its purpose, improving consumer acceptability – and given the debate about how these funds should be allocated, using the name ‘tourism’ in the title may also make it more difficult for politicians to use these tax receipts for any non-tourism related activities.”

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