Caithness business chief calls for share of ‘tourist tax’ to go to Highland firms

Highland businesses should be entitled to claim a share of the tax spoils they could be expected to claw in if a new visitor levy comes into force.

Caithness business leader Trudy Morris says accommodation providers will incur extra costs in implementing the so-called tourist tax – and deserve to get a cut of the new income stream.

Highland Council is proposing a five per cent surcharge on all overnight accommodation charges – with exceptions for gypsy traveller sites – in order to fund infrastructure improvements across the region.

The idea will be discussed at a meeting on Thursday, when councillors will decide whether to press ahead with the consultation.

It is estimated such a scheme could generate £10 million net revenue income.

Ms Morris, chief executive of Caithness Chamber of Commerce, argued that while visitor levies have been successfully introduced in other countries and cities, there are several concerns around the proposed Highland-wide scheme.

She said: “The hospitality sector in our region is made up of a rich tapestry of small to medium-sized enterprises (SMEs) and zero exemptions will impact these smaller and micro businesses, many of which fall below the VAT threshold and may deter them from continuing to operate.

“The hospitality industry is already hard-pressed and faces increased costs from 2025 through rises in Employers National Insurance and the National Minimum Wage.”

The visitor levy is considered a “priority action” within the council’s programme, ‘Our Future Highland 2022-2027’.

Ken Gowans, the local authority’s economy and infrastructure chairman, said: “Tourism is one of our most important sectors and the levy could form an essential part of how we sustain, support and develop the services and infrastructure which the sector relies on.

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“We have been engaging with stakeholders and I would like to thank all the individuals and businesses who have taken part to date for their input and help to get us to this stage.

“If approved, the intention is for the 12-week public consultation period to commence on November 15 and close on February 7, 2025.”

Ms Morris wants to understand more of the details about the plans, but insists that businesses in the far north deserve some form of recompense for their part in the tax collection.

“Edinburgh Council has previously intimated their scheme would allow for a percentage fee of 1.5 per cent of raised revenue to be retained by the providers collecting the charge,” she explained.

“Accommodation providers are likely to incur additional charges on top of the levy payment, such as credit card fees and commission charges. Retention of a percentage of the fee would help to contribute to these additional costs, and we call on the Highland Council to consider a similar approach.

“There is so much still unknown, and we welcome further consultation and encourage all businesses and consumers to feed into the process. This won’t just affect visitors and accommodation providers; it will add a cost to overnight stays for all.”

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “Highland Council must tread carefully with plans for a visitor levy. If they do this, they must do it right.

“We have seen that short-term let licensing has been far from plain sailing and the same affected small businesses now look set to become de-facto unpaid tax collectors. The accumulative regulatory impact could cripple businesses at a time when recovery is precarious.

“Any levy must be set fairly, have good governance and thoughtful implementation at its core, and monies raised ring-fenced for tourist infrastructure. Failure to take these steps could result in a levy that erodes the very industry it is supposedly intended to support.”

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