FSB urges Glasgow to impose lower tourist tax – Daily Business

Glasgow has been urged to conduct a new economic impact assessment of its proposed visitor levy to avoid causing unnecessary damage to the city’s hospitality sector.

The Federation of Small Businesses say it should consider lowering its proposed visitor levy, or tourist tax, and warns of the dangers of a one-size-fits-all solution.

Scotland’s largest council is proposing a 5% visitor levy, in line with Edinburgh, which it projects will raise approximately £12.5 million a year.

In its response to the council’s consultation, FSB Scotland has raised concerns about the potential impact of the levy on the city’s tourism industry and on small accommodation providers in particular. 

Hisashi Kuboyama, FSB Scotland’s development manager for Glasgow and the West of Scotland, said: “If it is implemented carefully, the Visitor Levy has the potential to deliver real benefits for Glasgow. It could provide vital, distinct investment to enhance the city as a destination, support the tourism sector, and strengthen the wider economy and community. 

“However, while visitor levies are common in major tourist destinations globally, some research suggests such charges could negatively affect tourism and the local economy. Accommodation providers we spoke to are also concerned about its potentially negative impact. 

“It is important to appreciate there is no ‘one size fits all’ approach that guarantees success in every location. What works in Paris, Barcelona or Edinburgh, for example, might not necessarily work in Glasgow.” 

FSB Scotland highlighted a recent impact assessment commissioned by the Welsh Government, which found a visitor levy could reduce tourist numbers by up to 2.5% and cut visitor spending by as much as £35m a year. 

Mr Kuboyama said: “Glasgow’s businesses deserve greater clarity on the levy’s likely effects. Therefore, we are calling for a new, Glasgow-specific economic impact assessment, including a detailed examination of lower rates of Visitor Levy charge, to provide a clearer understanding of its potential impact.” 

FSB Scotland is also calling for a cap on the number of nights the levy is charged, both to reflect Glasgow’s ambition to extend visitor stays, and to ensure visiting workers are not faced with unlimited charges. 

In addition, it wants a reassessment of the proposed 1.5 per cent retention rate offered to accommodation providers, which is designed to assist them with setup and running costs. FSB has warned this is likely to leave many small and micro accommodation providers out of pocket. 

It says it is vital there is proper representation of small and micro businesses on the Visitor Levy Forum, which will help decide how the revenue raised will be spent, in line with their dominance in the sector, FSB added. 

Mr Kuboyama said: “Glasgow’s visitor accommodation sector largely consists of smaller businesses. According to government figures, of the 155 VAT-registered visitor accommodation providers in the city, 120 are micro and small businesses. There are hundreds more on top of that who are non-VAT registered, the vast majority of whom are small and micro providers.  

“They need support and guidance to mitigate the financial and administrative burdens caused by the introduction of a visitor levy. They also need to be properly represented in the Visitor Levy Forum, which will play a key role in determining how the proceeds of the levy will be used. 

“The city’s small businesses need support rather than extra burdens placed upon them. With the right safeguards, this levy could help Glasgow grow as a top-tier destination while protecting the businesses at its heart.”