Last week, the City of Edinburgh Council (“CEC”) passed Scotland’s first Visitor Levy, using the powers available to it under the Visitor Levy (Scotland) Act 2024 (“the Act”). 

In recent weeks, slight adjustments, passed by CEC, were made to the Visitor Levy proposals. The levy will now apply to overnight stays in Edinburgh from 24 July 2026, booked and paid for (in part or full) on or after 1 October 2025. This extends the amount of time accommodation providers have to prepare for the levy’s introduction.  

A number of amendments were rejected, including proposals to reduce the rate of the levy to 4%, and a proposal by some councillors to increase the rate to 8%. As originally proposed, however, the rate of the levy will be 5%, payable for a maximum of five consecutive nights.

How should the sector prepare during the implementation period? 

The nine-month implementation period has now begun, and accommodation providers will need to consider how they will administer the levy when bookings are made. Accommodation providers will also be required to:

• submit quarterly reports, detailing the total accommodation charges and the total levy collected to a national online visitor levy portal; 
• keep accurate records of all transactions subject to the levy, and keep this available for inspection by the CEC; and
• pay the levy to CEC at the same time as quarterly reports are submitted. 

Accommodation providers who fail to do so may be subject to penalties by the CEC. 

This implementation period should be used to delegate responsibility for the levy, update point of sale and booking software, update booking terms and conditions and to train staff to ensure compliance with the Visitor Levy scheme when it applies on 1 October 2025. 

How will the funds be spent? 

The Act sets out that the net proceeds of the Visitor Levy must be spent on facilitating the Visitor Levy’s objectives and on developing facilities and services for those who visit Edinburgh for business and leisure. After administration costs, the CEC has proposed that:

• £5 million per annum will be spent on housing and tourism mitigation; 
• £2 million over three years will be spent on participatory budgeting; and
• 2% of remitted funds will be reimbursed to accommodation providers to cover the cost incurred from operating the levy. 

That said, a final decision on the use of funds will be made by the Visitor Levy Forum. The CEC are set to recruit a Chair of the Visitor Levy Forum immediately, and the Forum will then be established to advise, review and modify the scheme thereafter.  

With the implementation period now fully commenced, our Public Law experts are on hand to advise on what steps you should take to prepare for and administer the Visitor Levy before it applies to bookings in October 2025. 

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