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News & Press: General

UKH responds to City of Edinburgh Council Tourist Tax Survey claims

09 January 2019   (0 Comments)
Posted by: Pernille Thomsen
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UKHospitality refutes claim by City of Edinburgh Council that accommodation providers in Edinburgh support the introduction of a tourist tax. 

 

William Macleod, UKHospitality Executive Director for Scotland, said:

"UKHospitality is concerned at the assertion by City of Edinburgh Council that 51% of accommodation providers in the city are supportive of a tourist tax or transient visitor levy (TVL) being introduced in the city. UKH is in no doubt that the vast majority of accommodation businesses in the city (including hotels, serviced apartments, B&B’s, hostels and self-catering properties) are opposed to a TVL. This is clear from among the independent operators and larger chains in UKH membership and from the membership of the Edinburgh Hotels Association.

"The Council fails to make clear that the survey response refers to 87 of the 170 accommodation businesses that responded to the council’s survey and representing, respectively, 4% and 8% of the city’s accommodation businesses. It would be helpful if the Council made clear which types of accommodation businesses have responded. This is an important point as, unlike the larger hotels and accommodation businesses, a significant number of smaller accommodation businesses in the city make no contribution to public finances through business rates (being exempt under the Small Business Bonus Scheme) or VAT (as they trade below the annual turnover threshold of £85,000) and have less to lose if consumers are saddled with a further and uncompetitive tax.

"UKH opposes the introduction of a TVL in Edinburgh, or for that matter anywhere in Scotland, primarily on grounds of price-competitiveness. The UK is one of only three EU countries which do not apply a reduced rate of VAT to accommodation and tourism services (on average, the rate of VAT on accommodation in the EU is around half of that in the UK). Moreover, while it is true that many EU countries do impose some form of tourist or bed tax, this is done against a much lower rate of VAT. To impose an additional tax on visitors to Edinburgh and Scotland is potentially damaging to tourism and fails equitably to compare the competitive position.

"Our visitors are price-sensitive and it is naïve to assume that any additional tax will come without cost have no effect on visitor behaviour. Using robust academic studies of tourism price-sensitivity and data from a survey of visitors to Edinburgh conducted over the Autumn of 2018, UKH has estimated that the annual negative economic impact which will arise from the imposition of a TVL at £2 per room, per night will be in the region of £175m - £200m in Scotland (£44m - £94m in Edinburgh) being far greater than the amounts expected to be raised by a TVL.

"The Scottish Government is in the midst of conducting a national discussion on TVL and has been clear that is has no plans for the introduction of any such tax on consumers (which will be payable by residents of Scotland as well as by visitors to the country). Instead of pushing ahead with its proposals  for the introduction and administration of a TVL the City of Edinburgh Council would do well  to await the outcome of the Government’s deliberations on the principle of such a tax which, if to be taken forward, will require clarification of many unanswered questions, primary legislation, and formal consultation which will, hopefully, take more account of the views of an industry which understands its consumers than has the City Council."

-ENDS-

Notes to editors
  • UKHospitality is the new trade body representing the UK’s hospitality sector, established following a merger approved in February 2018 between the Association of Licensed Multiple Retailers (ALMR) and the British Hospitality Association (BHA)
  • UKHospitality is the authoritative voice for over 700 companies, operating around 65,000 venues in a sector that employs 3.2 million people
  • The body speaks on behalf of a wide range of leisure and ‘out-of-home’ businesses, from FTSE 100 enterprises to niche groups and independent single-site operators
  • For the first time, the sector has a single voice bringing together businesses from all aspects of hospitality; coffee shops, hotels, serviced apartments, pubs, restaurants, leisure parks, nightclubs, contract caterers, entertainment, stadia and visitor attractions
  • Engaging with government, the media and the public, UKHospitality works to develop a robust case on how to unlock the industry’s full potential as the biggest engine for growth in the economy and ensure that the industry’s needs are effectively represented
  • The sector creates £130bn in economic activity and generates £38bn of tax for the Exchequer, funding vital services
  • Hospitality represents 10% of UK employment, 6% of businesses and 5% of GDP
  • Hospitality is the 3rd largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined
  • Member benefits include free advice and expert guidance on regulation, finance and health and safety as well as savings on services from carefully selected business partners.

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