Tourist tax plan 'could cost the north economy £16 million'

A PLAN to introduce a tourist tax in the Highlands by 2021 could cost the north economy £16 million, a business leader has warned.

David Richardson of the Federation of Small Businesses (FSB) hit out yesterday after the proposal was approved by Highland councillors. They say the transient visitor levy will raise between £5 million and £10 million which would be used to invest in tourism.

Andrew Mackay, who has hotels in Wick, Thurso and Castletown, is also unhappy with the proposal and described the decision as "disappointing".

He said: "There are strong feelings against this tax as it will set a precedent and have a negative effect on future trade. The council is not listening to the industry at all.

“They are trying to strangle the goose that lays the golden egg."

Mr Mackay acknowledges Highland Council has to “balance the books" but feels the tourist industry is "an easy target". While he welcomed money being invested in tourist infrastructure he argued the tax will act as a disincentive and make it more difficult to attract visitors to the north.

The hotelier said plans to exempt locals from the tax would be “a bonus" but wondered how the system would be governed. "We will become tax collectors for the council,"said Mr Mackay, who vowed to continue to campaign against the tourist tax.

They are trying to strangle the goose that lays the golden egg.

Trudy Morris, chief executive of the Caithness Chamber of Commerce, said the tourism sector is facing unprecedented challenges with recruitment and retention of skilled staff and the damaging uncertainty around Brexit, on top of long-standing issues around business rates and VAT on tourism activities.

"We are extremely disappointed that members have chosen to push ahead with this damaging tax despite the impacts it will have on tourism businesses,” she said.

“We would ask that, as the council moves ahead with its work to implement the levy, it engages closely with and listens to the concerns of those businesses which will be impacted and ensures that these impacts are minimised wherever possible."

Mr Richardson added: "The Highlands is already an extremely expensive holiday destination and this new tax will make us even more expensive. It might well equate to a loss of £16 million to the economy… all to raise between £5 million and £10 million for the council."

Councillors agreed the plan on Monday following a public consultation which generated more than 6600 responses. Almost two-thirds (65.1 per cent) of those in the online survey were in favour of a tourist tax.

The plan needs the approval of the Scottish Government before it can be implemented.

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