Economic Impact, modelling and evidence
Has the Council done an impact assessment?
Answer: Yes. An initial impact assessment was presented in the Argyll and Bute Council report on 24 June, Appendix 3. This 12-week public consultation will help inform and update the draft impact assessments by gathering views and evidence from residents, visitors, businesses and other stakeholders. This information will assist officers in evaluating the potential impacts, benefits and risks of a Visitor Levy for the tourism sector, local communities and the wider economy.
The updated impact assessment will then form part of the report to be presented at a future meeting of Council.
One attendee referred to Scottish Government research from 2021 which found that a 3% visitor tax might reduce visitor numbers and spending. They asked whether introducing a visitor levy in a rural area like Argyll and Bute could have similar or greater negative effects, particularly if the charge is higher.
Answer: The Council is aware of the Scottish Government research and recognises that it identified the potential for a visitor levy to influence occupancy levels and visitor spending. However, the impact of a potential levy depends on several factors, including the amount charged, how visitors would respond to it, accommodation prices, the nature of the destination, and how the money raised would be invested. The Council is not assuming that a visitor levy would have no impact. Instead, the purpose of the consultation is to gather evidence and views to help councillors understand both the potential benefits and the potential drawbacks of introducing a visitor levy in Argyll and Bute.
Since that research was carried out, the law has changed to allow councils to consider a flat-rate charge as well as a percentage-based levy. The current consultation is therefore seeking feedback on a revised proposal. No decision has been made on whether a visitor levy will be introduced. Councillors will consider consultation responses, impact assessments and other available evidence before making any decision.
How much money does the Council expect a visitor levy to raise each year, and has any work been done to estimate how much island residents could end up paying if they need to stay overnight on the mainland?
Answer: The amount that can be raised by a levy, if introduced, will depend on the flat rate. Details can be viewed in Table 1 in the 29 April Council paper. No work has been done on the impact on island residents per se, but issues have been captured in the impact assessments outlined in Appendix 3 of the Council paper on 24 June. The responses to the questions posed in this 12-week public consultation, will assist in updating the content of the draft impact assessments by gathering as much information as possible to allow officers to evaluate the potential consequences and benefits to the tourism sector and communities.
We were asked why the Council is consulting on a £5 flat rate Visitor Levy when the only independent modelling it holds, the University of Edinburgh report on 16 December 2024, examined only a percentage-based levy
Answer: The Council commissioned independent modelling from the University of Edinburgh during development of the previous Visitor Levy proposals, which were based on a percentage rate. That work formed part of the evidence base considered by councillors.
The current consultation relates to a revised scheme based on a flat-rate charge. This option was not available when the University of Edinburgh modelling was commissioned, as the legislation at that time only permitted a percentage-based levy. The option of a flat-rate levy was introduced subsequently through amendments to the legislation.
To support consideration of the revised scheme, the Council undertook modelling using accommodation capacity information together with Scottish Tourism Economic Activity Monitor (STEAM) 2024 and VisitScotland data. The results were published in the April and June 2026 Council papers. The modelling estimated that a £5 per room/area per night levy could generate around £10 million in gross income, with approximately £1.5 million relating to national and local exemptions, resulting in an estimated £8.5 million net income before consideration of business administration support arrangements.
The purpose of the current consultation is to seek views on the revised scheme and the supporting evidence before any decision is made by elected members. No decision has yet been taken on whether a Visitor Levy Scheme will be introduced in Argyll and Bute.
The detailed assumptions, methodology and evidence behind the projected costs and benefits of the proposed visitor levy should be publicly available
Answer: The Council recognises that stakeholders hold differing views on both the potential costs and potential benefits of a Visitor Levy Scheme, and that some consultees have questioned the assumptions and methodology used within the published modelling. The purpose of the consultation is to allow those views, evidence and concerns to be formally considered before any decision is made. We have published the assumptions and methodology used to support the revised scheme proposals on the Council website. The modelling was based on accommodation capacity information together with Scottish Tourism Economic Activity Monitor (STEAM) 2024 and VisitScotland data. The resulting estimates, including projected gross and net income figures, were published within the April and June 2026 Council reports.
In addition draft impact assessments have been published as part of the consultation process and are intended to be refined and updated considering consultation feedback and any additional evidence received. Councillors will consider consultation responses, impact assessments and the wider evidence base before determining whether a Visitor Levy Scheme should be introduced and, if so, what form that scheme should take.
Consultation process and engagement
One of the recurring questions is about whether the Council followed the Gunning Principles when devising the survey.
Answer: Yes. At the end of each survey questionnaire the following question has been included: “Argyll and Bute Council is considering whether to introduce a Visitor Levy Scheme. No decision has yet been made. The Council is seeking views to help inform its consideration of the proposal. What is your view on whether a scheme should be introduced, and what are the reasons for your answer?” All these responses, including any caveats and additional concerns will be captured.
Four Gunning Principles for public consultations:
- Formative stage: Consultation must happen while proposals are still open to change and not yet decided. This has been met.
- Sufficient information: Authorities must give enough clear facts and reasons so people can understand the issues and reply in an informed way. This has been met. All council papers, Visitor Levy Scheme proposals being consulted on and responses to all webinar questions are all available on the Council website at www.argyll-bute.gov.uk/visitor-levy
- Adequate time: Participants must be given enough time to read the materials and prepare their feedback. This has been met with the implementation of a 12-week consultation period.
- Conscientious consideration: Decision makers must genuinely and openly review all feedback before deciding on the final outcome. This will be met as all consultation findings will be presented to councillors who are the decision makers.
We were asked what processes and rationale the Council has put in place to ensure a meaningful consultation.
Answer: Further to the Visitor Levy (Scotland) Act 2024 which granted Scottish local authorities the power to introduce a visitor levy, a Visitor Levy (Amendment) (Scotland) Act 2026 entered the statute book in May 2026. The fundamental change to this legislation is the inclusion of a flat rate visitor levy per room/area per night providing councils with greater flexibility over how to design and implement a visitor levy scheme, if approved.
The proposed visitor levy scheme for Argyll and Bute now suggests a flat rate. As this is a different visitor levy scheme to that consulted upon in 2025, where the proposed visitor levy was to be calculated using a percentage rate on the accommodation charge per night, there is a statutory requirement to conduct a separate 12-week consultation process on this revised visitor levy scheme. All the Gunning Principles have been met. The overall context for seeking views on visitor levy is that the visitor economy is a key industry for Argyll and Bute. The 2.4 million staying visitors to the area (2025) expect and use many public services that are used also by residents.
To keep the area as a top visitor attraction we must consider the harsh reality that many services used by visitors and shared with residents are not a statutory duty of the council to deliver. Council funding is under huge and growing pressure, with a forecast gap of almost £65 million by 2032.
Services used by visitors include for example - roads and waste services, car parks, electric vehicle charge points, public toilets, walking paths, public transport. This can give rise to negative impacts for the host community and for visitors themselves. For example, the extra waste produced by tourists that needs to be dealt with, the erosion of footpaths and depreciation of other infrastructure.
The national visitor levy legislation gives an option for raising investment specifically in the visitor economy and could assist Argyll and Bute’s future as a competitive visitor destination.
Another question was whether the Council will consult on the allocation of the money collected through the levy.
Answer: Advice on the allocation of the money will be taken from the Visitor Levy Forum that visitor levy legislation requires to be established if the proposals are taken forward. Decisions will be made by councillors.
What costs and hours have been spent on the Visitor Levy to date, and the same cost/hours of the consultation.
Answer: Council staff involved in this area of work do not record periods of time spent on a particular task. All activities were carried out by existing staff in addition to normal duties. As part of trying to reach as many people as possible, we have spent approx. £1,000 on local newspaper adverts encouraging people to give views.
Administration and impact on accommodation providers
Why would accommodation providers be responsible for collecting the visitor levy and what impact could this have on businesses? There are concerns about the administrative burden on small and micro accommodation providers, also about the tax treatment of levy income and whether businesses could incur additional VAT or income tax liabilities as a result of collecting the levy.
Answer: The requirement for accommodation providers to collect a Visitor Levy is set out in Scottish legislation and is not determined by Argyll and Bute Council. Accommodation providers are responsible for collecting the levy because they hold the booking information and know when a chargeable overnight stay has taken place.
The Council recognises that there will be an administrative burden associated with operating any Visitor Levy Scheme, particularly for smaller accommodation providers and micro-businesses. For that reason, consideration is being given to a 2% deductions scheme, whereby accommodation providers would retain 2% of the levy collected to help offset administration costs if a Visitor Levy Scheme is approved. Feedback received to date suggests that a standard percentage retention may not fully offset costs for some smaller businesses. The Council will therefore consider whether additional mechanisms may be required, such as minimum retention levels or alternative support arrangements.
In relation to VAT and income tax treatment, these matters are determined through national taxation legislation and HMRC guidance rather than by local authorities. The Council recognises the concerns that have been raised and these have been highlighted by the Council through regional and national discussions. The consultation process is intended to help councillors understand the potential benefits and potential impacts of a Visitor Levy Scheme, including any implications for accommodation providers and rural micro-businesses, before any decision is made. Depending on the agreed use of levy revenues, tourism businesses may also be able to benefit from investment and support funded through the scheme.
Exemptions
Would residents of Argyll and Bute have to pay the levy if it was introduced
Answer: Views on exemptions are being sought as part of the consultation questions. Over and above the national exemptions two additional exemptions have been proposed for Argyll and Bute:
- Healthcare visits by islanders to the mainland of Argyll and Bute (including carer(s) accompanying vulnerable patients to appointments).
- Outdoor education centres with a focus on young people, some of whom may come from deprived backgrounds, on residential trips.
Increasing the number of local exemptions over and above the mandatory national exemptions, will make any visitor levy scheme, if approved, more complex to administer.
Would people have to pay the levy and then apply for a refund or exemption afterwards? If so, could this make the process complicated and discourage eligible people, such as those travelling for healthcare, from claiming due to the need to provide personal information? How would a healthcare exemption work in practice for both visitors and accommodation providers?
Answer:
The intention behind the proposed healthcare exemption is to ensure that people travelling for essential healthcare purposes are not disadvantaged by the levy. However, there is a balance to be struck between fairness, simplicity and the practical administration of the scheme.One of the reasons the draft scheme does not include a large number of exemptions is that every additional exemption brings extra administration, additional costs and can reduce the overall revenue generated by the levy. This can create burdens for accommodation providers, visitors and the Council itself.
The consultation is seeking views on whether the right balance has been struck. A simpler scheme may be easier and less costly to administer, but it could also mean that some groups, including island residents travelling for healthcare, may end up paying the levy unless a specific exemption is in place.
The proposed healthcare exemption is intended to recognise those circumstances, but the detail of how it would operate has not yet been determined. Key questions include what types of healthcare appointments or treatments would qualify, what evidence would be required, who would assess eligibility, and whether any exemption would be applied at the point of booking or accommodation stay, or through a separate process.
The Council is mindful that requiring people to pay first and claim back later could be seen as burdensome and may discourage some eligible individuals from applying, particularly if sensitive personal information is required. Equally, accommodation providers will want clarity and will wish to avoid taking on complex administrative responsibilities. As part of ongoing work, we are exploring whether any exemption process could be streamlined, including through potential data-sharing arrangements with NHS colleagues, should a Visitor Levy be introduced in Argyll and Bute.
The consultation is therefore seeking views not only on whether a healthcare exemption should exist, but also on how it could operate in a way that is fair, proportionate and practical for both visitors and businesses. Any final scheme would need to set out clear arrangements for eligibility, evidence requirements and administration before implementation.
Have other exemptions been rejected because of the admin burden and cost of dealing with them?
Views are sought on the proposed local exemptions in the consultation surveys. One of the factors the Council has had to consider throughout the development of the draft scheme is the administrative complexity associated with exemptions. As part of that process, several potential exemptions have been considered. Concerns were raised that a wider range of exemptions could increase the administrative burden on accommodation providers, reduce the overall levy income available for investment, and potentially create additional costs associated with checking eligibility and administering claims.
The proposed healthcare exemption reflects a policy decision that people travelling for essential healthcare purposes may warrant different consideration. However, there are important practical questions around how such an exemption would operate in practice, including eligibility, evidence requirements and administration.
The Council recognises that any exemption needs to be capable of being administered in a practical and proportionate way for both accommodation providers and visitors. The consultation is therefore seeking views not only on whether healthcare-related travel should be exempt, but also on the practical implications of introducing and operating such an exemption.
Feedback received through the consultation will help councillors assess whether the proposed exemption is appropriate and how it could be implemented in a way which balances fairness, practicality and administrative burden, should a Visitor Levy go ahead.
Transparency
What specific plans are there on how the funds raised will be spent across the area? Is there is a ‘wish list’ of what the money will be spent on?
Answer: There are no specific plans, however a range of possible areas of expenditure are included within the consultation survey for input by responders. Any expenditure associated with visitor levy income will comply with government legislation and be overseen by a Visitor Levy Forum before being decided upon by councillors. Visitor levy income must be used for investments that support the visitor economy.
A range of possible examples are included in the survey for example, increases to marketing and promotion of Argyll and Bute as a place to visit, improvements to visitor facilities including for example public toilets, car parks etc, investment in tourism skills, support for small businesses in the hospitality sector, improved visitor signage. The Council already invests considerable capital sums in improving the tourism offer across Argyll and Bute often working with our numerous partners. The levy, if approved, could allow this work to be sustained and improved.
One respondent said that many destinations where levies operate have different tourism markets, tax arrangements and local circumstances to Argyll and Bute. These differences make it difficult to predict the impact a levy could have in Argyll and Bute. And keeping the exemptions system simple to administer could result in additional costs falling on residents, to stay overnight for essential reasons.
Response: The tax systems of different countries are complex and cover many different aspects depending on the countries priorities. Levies are applied in many rural areas around the world and not just large cities. There’s a balance to be struck. One of the reasons the draft scheme doesn't include many exemptions is because every exemption adds complexity, administration and cost. In some cases, that can reduce the overall revenue generated by the levy and create additional burdens for accommodation providers and the Council.
Equally, keeping the scheme simple to administer can mean that some groups who have genuine reasons for travelling, including some island residents and mainland residents accessing services, may still end up paying the levy unless a specific exemption applies.
The proposed healthcare exemption is an attempt to recognise some of those circumstances, but there are still questions around how any exemption would operate in practice and whether the right balance has been struck. Ultimately, that's exactly the sort of feedback the consultation is intended to gather. Councillors will need to consider whether the proposed approach achieves the right balance between fairness, practicality and administrative simplicity.
