By Siân Swinton
More work needs to be done to ensure that a proposed visitor levy on overnight stays in the Western Isles and beyond does not negatively impact islanders, according to critics of the “tourist tax”.
Increased burden on business owners
The main concern around the levy is the possible negative impact that higher costs for accommodation and increasing difficulty in administrative work would have on tourism to the area and whether it could result in local small businesses struggling or having to close altogether.
The secondary concern that many believe has not been adequately addressed in the consultation phase is the increased costs for patients and the NHS when islanders travel to access healthcare.
In an open letter to various local organisations, community councils and politicians at local authority and government level, a North Uist business owner has made clear the lack of consultation on the levy and the worrying impact it could have on the rights of islanders.
Kathryn Johnson, who runs Uist Forest Retreat along with Angus Johnson, laid out her varying concerns in the letter including the difficulty VAT registered accommodation providers would face in conjunction with the levy. She said: “At 5%, those staying in VAT registered businesses will pay 6%. The UK government has been clear that Scottish Ministers ‘do not have the legal competence’ to determine how a visitor levy is treated for VAT purposes. This means that once a 5% levy is added to the room rate, inclusive of a 20% VAT charge, the levy itself is then subject to a further 20% VAT. No where in Europe does a tax on a tax exist.
“If you take a room rate of £100, inclusive of 20% VAT. A 5% Levy of £5 is added to the bill. The Levy itself is now subject, again, to VAT. In this case £1. Taking the original room rate from £100 to £106 per night.”
Who should collect the tax?
Worries were raised about the levy adding to business’ VAT bills last Summer when the Comhairle met in South Uist and discussed the issue during a meeting of the Sustainable Development Committee. Members raised suggestions that the levy could be collected at ‘point of entry’ rather than by the accommodation provider. This would mean paying at the point at which visitors reach the island, whether by boat or plane, rather than at their hotel or B&B.
Some island accommodation business owners have already struggled with the extra cost and administrative work created by the new short-term let regulations and multiple cancellations caused by ferry disruption and are now concerned that the levy would be a further burden of cost and work.
In a consultation survey currently being undertaken on behalf of the Comhairle, Urban Foresight asks the question: “If an option, would you support a ‘point of entry’ levy that would allow all visitors to contribute to the islands (including overnight, cruise ship and motorhome visitors)?”
Impact on patient travel
The consultation also states that “there is a compulsory exemption for those in receipt of specified disability benefits, payments or allowances.” but asks if respondents believe anyone else should be exempt from the charge. Suggestions include local residents, children and young people, homeless people and those seeking medical treatment.
Patient travel for islanders has been an ongoing concern for many years, but the last few years in particular have seen worries around adequate access to healthcare for islanders and those living in other rural locations skyrocket.
Many islanders have to travel away from home to access treatment such as chemotherapy, CT and MRI scans, operations and maternity care. Patients who travel from Uist to Stornoway or Inverness would be subject to the levy as the Highland Council local authority has also proposed a 5% visitor levy. Edinburgh City Council was the first local authority to approve the introduction of a ‘tourist tax’ and Glasgow City Council has begun a consultation on introducing their own 5% levy.
Islanders’ access to healthcare has already been called a ‘breach of human rights’ in recent months. In November, the Scottish Human Rights Commission published a report on access to health, housing and food across the Highlands and Islands and said: “Critical issues include an apparent failure to meet the most basic international obligations related to the right to health, the right to housing and the right to food.
“In certain areas, sustained cuts to critical health services have been made with significant impact on the local population. There is concern over the lack of available health services in certain areas including sexual and reproductive health services, meaning people have to travel great distances to access health services.”
Many people travelling for health reasons have to rely on help from NHS Patient Travel to pay for their travel and accommodation. The funding for overnight accommodation through the scheme is capped at £60 per night which already very rarely covers the actual cost of accommodation across the Highlands and Islands.
Increasing the cost of accessing healthcare, the most vulnerable are placed at risk.
Open letter to deputy first minister
Conservative MSP for the Highlands and Islands region Tim Eagle has encouraged people concerned about the effects of the proposed levy to sign an open letter to deputy first minister, Kate Forbes, asking for ScotGov to “give due consideration to abandoning the levy altogether or delaying its implementation in local authority areas where it is not appropriate given price sensitivities in rural and island economies dependent on tourism.”
The letter also says that “Neither the Highland Council, or any other council to date, has undertaken an indpendent Economic Impact Assessment modelling the effect this levy might have on accommodation businesses in their area.”
If the Visitor Levy were to go ahead, the Comhairle estimates that it would come into force by the end of 2026.
The current consultation process will inform the implementation of the levy including whether there will be any further exemptions required, what support businesses would need to adequately collect the tax and what the money would be spent on.
According to the Comhairle, “net proceeds from the Visitor Levy must be spent on developing, supporting and sustaining facilities and services for visitors in the area.”
Public engagement sessions were held in Balivanich Hall and Stornoway Town Hall in March, though many Uist based accommodation providers told us they had been unaware of these sessions until after they were held.
The consultation survey is available on the Comhairle website, but is not immediately obviously found. Searching for “Outer Hebrides Visitor Levy” on the website and navigating to the Engagement Sessions page will show a link to the survey which can be responded to before 11 April.
