Government ‘climbdown’ to give councils powers to set flat rate visitor levy

Scottish ministers are “actively extending powers” to councils over how new visitor levies could be introduced – with authorities being given an option to introduce a flat rate charge.

The Tories hailed the move as a “welcome climbdown” by the government, claiming it was a “rare occurrence” of SNP ministers “accepting common-sense suggestions”

It comes after Holyrood passed legislation in 2024 giving local councils the ability to introduce a charge on overnight stays in hotels, self-catering properties and other forms of accommodation.

This is applied as a percentage of the cost of the accommodation – with both Edinburgh City Council and Glasgow City Council planning to bring in charges of 5%.

But now public finance minister Ivan McKee has said the Scottish Government is “actively extending powers to local authorities, including the option to introduce a single flat rate or tiered flat rate model alongside the existing percentage-based approach”.

In a letter to MSPs on Holyrood’s Economy and Fair Work Committee, Mr McKee stressed that the charge has the “potential to deliver meaningful benefits for local communities, authorities, and businesses”.

While he said councils already have a “wide range of powers to introduce local flexibilities and structure the levy in a way that suits their local context” he added that ministers were “aware that some areas of Scotland are seeking greater flexibility in how the levy is applied and administered”.

The minister added that MSPs would be “kept informed” as the government seeks an “appropriate legislative vehicle” to make the change.

Murdo Fraser, the Scottish Tory spokesperson for business, economy, tourism and culture, said however that councils should always have had the ability to introduce a flat rate charge.

The Conservative MSP said: “This is an extremely welcome climbdown from the SNP minister following sustained pressure from the Scottish Conservatives and the industry.”

Mr Fraser added: “This is a rare occurrence of the nationalists acknowledging their current plans would have been damaging and accepting common-sense suggestions.

“Councils should always have had the power to introduce a flat rate when it comes to the visitor levy rather than setting it at certain percentages.”