Business leaders in Edinburgh have raised concerns about the timeline for implementing a new visitor levy, warning it could cause “significant disruption” for accommodation providers if introduced too hastily. The Federation of Small Businesses (FSB) has criticised Edinburgh City Council’s ambitious deadlines, stating there is insufficient time to ensure a smooth rollout of the scheme, which is set to launch from May this year.
The council’s proposed levy, expected to raise up to £50 million annually, would see a 5% charge applied to the cost of accommodation. It would impact hotels, B&Bs, self-catering properties, campsites, and caravan parks. However, the FSB has expressed concerns about the readiness of the digital infrastructure needed to support the initiative.
Concerns over IT systems and deadlines
The FSB’s development manager for Edinburgh and the east of Scotland, Garry Clark, highlighted the challenges of introducing the levy so quickly. Speaking ahead of a policy and sustainability committee meeting on Friday, 17 January, he warned that the online platform required to implement the levy is still in development and has not been fully tested.
“There is an expectation that B&Bs and other small operators will start applying the levy to advance bookings in 15 weeks’ time, but the booking platform which is being introduced for the purpose is still in development,” said Mr Clark.
“There simply isn’t enough time to meet the deadlines laid out by the city council without risking significant disruption to the businesses who will have to apply the charge and their customers.
“We know from experience that delivering new IT systems can be fraught with difficulties. It is vital the new platform, which is intended to be used in other local authority areas adopting a visitor levy, is thoroughly tested before bookings go live.”
Timeline and implementation details
Under the council’s current plans, the levy will apply to bookings made from 1 May 2025, for stays from 24 July 2026 onwards. While accommodation providers will not need to collect the levy at the point of booking, they will be required to submit returns and pay the council the levy amount starting in September 2026.
A spokesperson for the council clarified that the digital system in question is a levy collection platform, not a booking platform, and assured stakeholders it would undergo testing and pilot activity next winter.
The spokesperson stated: “As agreed by councillors next Friday, the visitor levy will apply to bookings made on or after May 1 2025 for overnight stays in Edinburgh on or after July 24 2026.
“Accommodation providers will only need to submit a return and pay the council the required levy amount from the end of September 2026, and businesses will be given reasonable time to complete this return.”
Balancing financial pressures and smooth implementation
While acknowledging the financial pressures faced by local authorities, Mr Clark stressed the importance of a seamless rollout over quick implementation.
“The council has declared its aim is to introduce the visitor levy as quickly as the enabling legislation will allow,” he said. “We understand the financial pressures local authorities are under and the importance of the new revenue stream to the council. But that shouldn’t be its priority—it should be ensuring as far as possible that the launch goes without a hitch.”
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Despite concerns, Mr Clark noted that many small businesses support the levy as a means to generate additional revenue for the city. However, he emphasised that unanswered questions about the process remain a source of uncertainty.
Council leader’s vision for the levy
City of Edinburgh Council leader Jane Meagher defended the proposal, describing it as a “once-in-a-lifetime opportunity” to sustain and enhance Edinburgh’s position as a world-renowned destination.
“With income of up to £50 million expected once it is established, the funding could provide Edinburgh with the single biggest injection of new funding this side of the millennium,” said Ms Meagher.
The revenue, she added, would enable the council to manage tourism sustainably and invest in projects that benefit both visitors and residents.
The road ahead
As councillors prepare to discuss the proposal this week, business leaders urge caution and careful planning to avoid potential pitfalls. The next steps include further discussions at the policy and sustainability committee on 17 January, followed by a vote at the full council meeting on 24 January.
While the visitor levy represents a significant financial opportunity for Edinburgh, its successful implementation will depend on whether the council can address the logistical concerns raised by businesses and stakeholders.
