Questions and answers
The council's case, and our answer
We think people deserve to see both sides. Here is the case for the levy as the council and its supporters make it, and why we don’t think it holds up for Perth and Kinross.
“Visitors should contribute to the services they use.”
Visitors already contribute. They spend £367 million a year here, and the businesses they support pay business rates, VAT, employers' National Insurance and wages that are spent locally. The council's own report says the levy would shrink that contribution by more than the levy raises.
“The money is ring-fenced for tourism.”
The law requires levy income to go on facilities and services substantially used by visitors. But that covers roads, car parks, toilets and public spaces, all of which the council already funds. The concern raised by over 100 local businesses is that levy money will replace existing council spending rather than add to it. If that happens, the visitor economy pays more and gets nothing extra. The council should commit, in the scheme itself, that levy funds will be strictly additional.
“Residents are exempt, so locals don't pay.”
Residents don't pay the levy directly. But residents work in the hotels, cafés and shops that lose trade, and own the businesses that lose customers. The modelled loss of around 196 jobs falls on local people.
“£4 is a small amount.”
On a £128 hotel room, perhaps. On a £25 pitch it's 16%, with no cap on nights. It's also £4 per night on top of a stay that is already subject to VAT at 20%, and the levy itself attracts VAT too.
“Reinvestment will make the area more attractive and bring visitors back.”
The council's own report tested this and found reinvestment offsets less than half of the economic loss. No specific projects have been identified. The report calls its reinvestment figures illustrative, not predictive.
“Lots of European destinations have tourist taxes.”
Many do, often popular cities managing overcrowding. Perth and Kinross does not have an overtourism problem across the area. It has a seasonal, price-sensitive rural visitor economy that the council's own tourism strategy wants to grow.
“The council is short of money.”
It is, and that's a real problem. But the council's own consultation page says it is looking for new ways to raise revenue. A tax that shrinks the local economy by more than it raises is not a solution to a funding gap.
“The levy is charged before VAT, so VAT isn't an issue.”
The levy is calculated before VAT, but VAT is then charged on it. A £4 levy costs the visitor £4.80 at a VAT-registered business. The levy also counts towards a business's turnover for the £90,000 VAT registration threshold, even though the business hands every penny to the council. A small guest house just under the threshold can be pushed into charging VAT on its whole business by money it never keeps.
“It's administratively simple now it's a flat fee.”
Simpler than a percentage, yes. But every accommodation business, including micro-businesses below the VAT threshold, must register, collect, keep records, file returns and pay. That burden falls hardest on the smallest operators.
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