Visitor levy

If your local authority is considering a visitor levy, early engagement should be underway. Please check their website or contact them directly for updates.

How the revenue is used will vary by local authority, but it must align with relevant tourism strategies.

Local authorities must publish an annual report detailing how levy funds have been spent. Before the first report, customers can be directed to the scheme's objectives.

Please see chapter 12 "use of funds" in the Guidance on the Visitor Levy for local authorities for more information and engage with your local authority to understand their plans.

If you operate in multiple local authority areas, you will need to engage with each one to understand their stance on the levy. Some authorities may choose to work together to introduce a scheme.

The visitor levy should be for the accommodation only. That means charges for breakfast, parking, WiFi or any other services, should not be included in the calculation.

Your local authority may publish detailed information on how to estimate various portions of the charge.

An example of how to calculate a levy for B&Bs and self-catering is included in chapter 10 "calculation of a levy" in the Guidance on the Visitor Levy for local authorities.

The visitor levy legislation does not determine how the levy should be listed when it is charged. Existing rules on pricing therefore apply.

You should be able to do one of the following (unless your local authority has specified differently and created their own regulations):

• include the charge within the room rate
• include the charge within the final tour package price
• list the charge as separate

It is important that you are transparent with the customer about the fact that a levy will apply.

It is recommended that businesses engage with local authorities who propose a visitor levy on this matter. You may also wish to contact your local Trading Standards office for support.

The guidance contains example calculations for B&Bs, hotels, self-catering, and more. Please see chapter 10 "calculation of a levy" in Guidance on the Visitor Levy for local authorities.

There are a few groups or individuals that are exempt from any levy. These are:

• certain people who are using overnight accommodation as their only or primary residence
• people staying on certain gypsy or traveller sites
• people receiving specified UK and Scotland disability benefits, payments, or allowance
• people who make use of accommodation on overnight transport like ferries, cruise ships, or sleeper trains

Local authorities also have power to introduce local exemptions that meet their own needs. They are encouraged to ensure limited administration or financial burden on businesses should they introduce any additional exemptions.

Please see the chapter 17 "exemptions" in the Guidance on the Visitor Levy for local authorities for more information and engage with your local authority to understand their position.

If you are VAT-registered, you would have to pay 20% VAT to HMRC for both the accommodation charge and the visitor levy.

Please see the section "VAT" within chapter 10 "calculation of a levy" in the Guidance on the Visitor Levy for local authorities for more information, including an example calculation on VAT.

You will have to charge the visitor levy if the local authority has confirmed that non-VAT registered businesses are included in the scheme.

Please refer to your local authority for more information or see the section "VAT" within chapter 10 "calculation of a levy" in the Guidance on the Visitor Levy for local authorities for more information.

Any amount you charge for the visitor levy will be included in your turnover. This will be used to determine if you need to register for VAT.

It's at the discretion of the local authority to include or exclude businesses that fall below the VAT threshold because of the visitor levy scheme. A local authority must state whether it intends to include businesses below the VAT threshold in its visitor levy scheme.

Please see the section "VAT" within chapter 10 "calculation of a levy" in the Guidance on the Visitor Levy for local authorities.

An online reporting platform is being developed by some local authorities with the Improvement Service, with the intention that it will be used nationally. Your local authority will confirm this and any other systems with you once available.

This will depend on the local authority. However, the current intention with the Improvement Service platform is for returns to be made quarterly – please see "Are there specific software or tools recommended for managing the visitor levy".

Please see chapter 16 "remittance" in the Guidance on the Visitor Levy for local authorities for more information and engage with your local authority to understand their plans.

Local authorities are encouraged to consider certain business costs. It will be for them to decide if and how they might support businesses in this context.

For example, the City of Edinburgh Council has proposed to use levy funds to mitigate costs for accommodation providers (1.5-2.5% of payable funds).

Please see the section "business costs" within chapter 14 "assistance to liable persons" in the Guidance on the Visitor Levy for local authorities and engage with your local authority.

Local authorities have the power to support businesses accordingly. This could be providing information on collecting and remitting the levy or providing some form of financial relief.

Local authorities don't have any statutory requirement to provide support and it's up to them to decide what support they will provide, if any.

Please see chapter 14 "assistance to liable persons" in the Guidance on the Visitor Levy for local authorities for more information and speak to your local authority.

Your local authority will communicate which information you need to submit to them as part of your returns (remittance).

Please see chapter 16 "remittance" in the Guidance on the Visitor Levy for local authorities for more information.

If the local authority chooses to operate exemptions via a process of reimbursement, then the visitor eligible for exemption would pay the levy as any other visitor would. Following the completion of their stay, the visitor would follow the steps outlined by the local authority to receive the relevant reimbursement from them. In this instance, the visitor wouldn't be required to show any documentation to the business.

The legislation allows for the local authority to ask the business to process the reimbursement. In this case your local authority might ask you to handle personal and sensitive data on visitors who are exempt.

Local authorities are encouraged to recognise any administrative burden that this incurs and take appropriate steps. Please see chapter 17 "exemptions" in the Guidance on the Visitor Levy for local authorities for more information and engage with your local authority to understand their position.

Consider updating your promotional material, adverts, and website to reflect the introduction of a visitor levy.

When displaying the price for the accommodation services provided, you should follow existing regulations on pricing, ie it should be clear to the customer that a visitor levy applies.

This should be done for those who book in advance as well as for those visitors who walk in on the day without having pre-booked.

When displaying the price for accommodation services, you should follow existing regulations on pricing. It should be clear to the customer that a visitor levy applies.

Existing regulations may be useful, such as the:

• Price Marking Order 2004
• Digital Markets, Competition and Consumers Act 2024
• Consumer Protection Approval Order 2005

If you have not done already, you can contact your local Trading Standards office for support. Local authorities are encouraged to work closely with accommodation providers at an early stage to ensure that invoicing is handled correctly.

Please see chapter 15 "billing of overnight accommodation" in the Guidance on the Visitor Levy for local authorities and engage with your local authority for more information.

In this scenario, the visitor levy applies, and the accommodation provider would remain the liable person. In these circumstances, an accommodation provider would have two choices:

1. Charge the levy at the point of booking
2. Charge the levy at point of entry to the property

In both cases, the levy collected should not be returned to the local authority until the visitor has stayed in the accommodation.

It will be for the local authority and businesses to consider arrangements for collecting a levy from bookings made after the visitor levy scheme comes into effect but before accommodation providers have put a system in place.

Please see the section “transitional provisions” within chapter 13 "liable persons" in the Guidance on the Visitor Levy for local authorities for more information and engage with your local authority who may be able to provide additional support.

If a visitor refuses to pay, you are allowed to cancel their booking. Alternatively, you can choose to absorb the cost of the levy yourself.

Please see the section "refusal to pay" within chapter 13 "liable persons" in the Guidance on the Visitor Levy for local authorities for more information and engage with your local authority who may be able to provide additional support.

The legislation only requires that the visitor levy is charged if a person actually spends a night at your accommodation business. You should only remit the levy charged to the local authority after a stay is complete.

If the visitor does not stay in your accommodation and no levy payment has been received, you do not need to take any action.

If the visitor already pre-paid the levy but did not stay in the accommodation, you'll have to refund them the levy in full. Any payment for the accommodation portion of the booking should be refunded in line with your refund policy.

Please see the section "cancellation" within chapter 13 "liable persons" in the Guidance on the Visitor Levy for local authorities for more information and speak to your local authority.

As the accommodation provider, you will always remain the liable person. However, you can plan for third parties to collect and remit the levy on your behalf.

Depending on the contract you have with a particular OTA, there may be costs associated with charging the levy due to the commission.

Local authorities may wish to consider supporting businesses with costs associated with collecting and remitting the levy. Please see chapter 13 "liable persons" and chapter 14 "assistance for liable persons" in the Guidance on the Visitor Levy for local authorities and engage with your local authority for more information.