Edinburgh councillors back plans to charge tourist tax

Credit: PA

Edinburgh is one step closer to becoming the first city in the UK to introduce a tourist tax after the move was approved by councillors.

Councillors in the Scottish capital have voted to introduce a £2 per night levy on tourists staying in the city, but the decision would still need to be passed by the Scottish Parliament before it could come into force.

The move is a first for a British city and could lead the way for other destinations to do the same.

The ballot comes in response to the city's growing need to develop its services for tourists.

Councillors hope any potential extra revenue from the tax will allow it to do this.

The measures would mean visitors to the Scottish capital could be charged for up to seven nights, adding an extra £14 for their stay, if Holyrood passes the proposal into law.

While those in support suggest it would help fund vital improvements in the city, opponents say it could actually damage Scotland's coffers.

Tourists visiting events like Edinburgh Fringe would have to pay the tax. Credit: PA

How will the tax work?

Visitors to Edinburgh staying in hotels, hostels and B&Bs will be charged £2 per night, per room for up to seven days.

It would bring the average cost of a stay in the city up by as much as £14.

People staying in short term lets and AirB&B-style accommodation would also have to pay the tax.

The tax would be a first for a British tourist destination - although Edinburgh isn't alone in suggesting implementing it.

Tourist taxes are widely used in top European destinations.

At the end of December, authorities in Venice said that they planned to charge people visiting the city of canals up to €10 per day to visit.

Rome also charges tourists to stay, the tax is added to their hotel bill at check out.

Before it can be introduced the plans will need to pass the approval of politicians in the Scottish parliament.

A spokesperson for the legislator said that the proposals will go before "scrutiny" before they could be put into law, adding that it does not take a view on such policies.

How much would the tax make and how would the money be spent?

Edinburgh Council anticipates that up to £14.6 million could be made for the city's purse every year.

The authority plans to invest the cash into "managing, supporting and increasing tourism in the city," adding that "investment should be targeted at infrastructure and public services improvements".

But UK Hospitality, an organisation representing tourist services and accommodation, has predicted that the tax could actually have a negative impact on the city.

It believes that up to £94 million could be lost annually should powers to introduce the tax be passed by Scottish ministers.

On Thursday, the organisation said it was "disappointed" at the decision.

It looks likely that the tax will pass parliament as the government has previously held a consultation on the matter and made provisions for such a tax in its annual budget.

The city attracts tourists from around the world to for its food, sights and culture. Credit: Chris Hitchings

Who would have to pay the tax?

People staying in all kinds of paid accommodation in the city would have to pay the tax.

People camping will avoid paying.

The tax would apply for a stay of up to seven consecutive nights.

The measure would mean that seasonal workers who work at or perform during long-term events in the city would avoid paying.

But there's a catch. The authority says that if visitors move accommodation during their stay they could end up paying more than the maximum £14, it said that it was working on a solution to this issue but that a resolution was "yet to be ironed out," if the powers are passed by the Scottish government.

Tourists visiting the Scottish capital would be liable to pay the nightly tax. Credit: PA

Could this be the start of more areas introducing a tourist tax?

Nationally, there is certainly appetite for such a levy.

Councillors in Cornwall have previously discussed the introduction of a tourist tax, the authority told ITV News that it is "always looking for innovative ways to increase revenue and to become more self-sufficient.

A tourist tax is an issue which has been raised by residents during our budget consultations and Cornwall Council is watching with interest the work that the Local Government Association is carrying out on this issue."

Across the country there appears to be an appetite to introduce tourist taxes. Credit: PA

In Cumbria, where tourism is worth an estimated £2.9 billion to the county, a tax is yet to be introduced - but there is backing for it.

The managing director of Cumbria Tourism, Gill Haigh, told ITV News that the organisation is "open to discussions to explore visitor levies, but it’s critically important that we recognise the significant contributions the tourism sector already makes to Cumbria’s economy and the quality of the county as a place to live.

"We need to better understand the impact such a levy might have on visitor behaviour, especially when competing with destinations which do not impose such a system."

Bristol City Council has previously debated introducing a charge on tourists.

The authority declined to comment when approached by ITV News, saying the matter is "not something the council has any comment to make on at this time."

London's Mayor, Sadiq Khan, has also mooted the idea.

A spokesperson for Mr Khan said in a statement: "London is one of the most popular destinations for tourists in the world.

"While the details need ironing out, the idea of visitors paying a small extra amount per night of their stay to help contribute to the city is one the Mayor supports.

"To do this, the Mayor would need extra powers, and is calling on the Government to change the law so he can introduce this levy as soon as possible."