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Impact Assessment of the Visitor Levy on Skye and Lochalsh Accommodation Providers

Background to the Survey

On 28 May 2024 the Visitor Levy (Scotland) Bill was passed by the Scottish Parliament, and became an Act on 5 July 2024 (“Act”). The Act gives local authorities the power to require accommodation providers to charge a Visitor Levy (“Levy”) at a percentage rate of the cost of the accommodation element, before VAT, of an overnight stay. The Levy will itself attract VAT at 20% on top of the percentage set by a local authority. The Highland Council has resolved to implement the Levy. The Council will be conducting a three month consultation on the Levy during the last quarter of 2024.


This survey is designed to ascertain business impacts of the Levy, in financial terms - given the content of the Act - on the tourism accommodation sector in Skye and Lochalsh. A link to the Act is attached at the end of the survey. The results of this survey will be used to create data that accommodation operators in Skye and Lochalsh, and organisations representing those accommodation operators, can use to respond to the Highland Council consultation on the Levy.


The earliest that a local authority can charge the Levy is Spring 2026, after an eighteen month period of consultation and feedback from stakeholders. In the interim, in April 2025, self-caterers will be impacted by the removal of the Furnished Holiday Let (“FHL”) tax allowances. On 29 July 2024, the UK Government confirmed the abolition of the FHL tax regime. This included capital allowances. The abolition of the FHL regime will see an end to these one off claims and owners will lose their ability to secure their allowance safeguarding future profits. It is important, if at all possible, for self-caterers affected by the FHL tax regime removal to bear this in mind when responding to the questions below.


The survey should take no more than 5 minutes to complete. All respondents will remain strictly anonymous.
1.What type of accommodation business do you operate?(Required.)
2.Please enter the first 4 characters of your Skye & Lochalsh postcode (i.e. IV51)(Required.)
3.Is your business VAT registered?(Required.)
4.If you are not VAT registered, would any of the percentages below on top of your current revenue take you over the VAT threshold of £90,000 turnover?*
This survey is entirely anonymous. We'll only use overall results to understand how the visitor levy might affect local businesses.
5.To help us gauge the levy's potential impact, what was your rough net profit in the last tax year?
6.What's your estimated net profit for this year? This helps us understand how the levy might affect businesses.
7.What is the maximum percentage increase plus VAT that you feel you can add to your current pricing while remaining viable?(Required.)
8.Highland Council can choose to exempt a business from the Levy if it is not currently VAT registered. Do you think the Council should exempt businesses that are not VAT registered?(Required.)
9.Are you considering closing your business given the financial challenges that the Levy presents?(Required.)
10.Are there any other comments you would like to make regarding the Highland Council’s implementation of the Levy?
*Please note that the VAT threshold is a rolling 12 month figure and is not aligned with the tax year - so in other words a business can go over the VAT threshold at any time


** Net profit is the money left after all expenses and taxes have been paid - the ‘bottom line’ (not to be confused with Gross Profit from which other operating expenses and taxes are paid)