Visitor Levy Appendix 2
Argyll and Bute Council · 24 September 2025
Back to Argyll and Bute Council — 24 September 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Appendix 2: Argyll and Bute Council: Integrated Impact Assessment Title of Proposal. Visitor Levy Intended outcome of the proposal Argyll and Bute Council elected members will need to decide if they wish to introduce a visitor levy scheme or not. It could be that members may wish to delay the introduction of a visitor levy at this time. A decision will be taken at the Argyll and Bute Council meeting on 24th September 2025. How does your proposal align with strategy? The Scottish Parliament passed the Visitor Levy (Scotland) Act in May 2024, which gives local authorities the ability to charge a set percentage on overnight accommodation paid by visitors and tourists to Argyll and Bute using visitor accommodation included within the scope of the legislation. Description of proposal Argyll and Bute Council is in receipt of an independent consultation report on draft proposals to introduce a visitor levy scheme across the region. Consideration on whether to progress with this fiscal policy, or reject it, or not to proceed at this time, will be discussed at the Argyll and Bute Council meeting on 24th September 2025. To date, nothing has been agreed by members. Lead and Appropriate Officers Lead officer: Fergus Murray Lead officer job title: Head of Development and Economic Growth Lead officer service: Development and Economic Growth Appropriate officer: Kirsty Flanagan Appropriate officer Job title: Executive Director Who will deliver proposal If a visitor levy scheme is introduced it will be implemented by cross-departmental teams with specific input from officers from Economic Growth, Revenue and Benefits and Communications together with input from other officers of the council as considered appropriate. Signed off by: Date: 10th September 2025
Page 2
Evidence Data – What data have you used to inform the IIA. The IIA will be informed by the independent visitor levy consultation report, dated 2 September 2025. Other information – This may include reference to reports by other people / organisations relevant to the impacts you identified. The draft visitor levy scheme proposals were outlined in a report to a Special Argyll and Bute Council meeting on 20 December 2024. The scheme was drafted using feedback from a pre-consultation exercise with the tourism industry, input from members who sit on the Visitor Levy Short Life Working Group, and input from industry representatives on the Argyll and Bute Shadow Visitor Levy Forum. Consultation – What consultation / engagement have you carried out to inform the IIA? The consultation report presents the analysis from a formal 12-week public consultation exercise that ran from 16th January to 10th April 2025. The consultation exercise was designed to gather widespread views on a visitor levy by providing different options for getting informed and involved; and to provide an understanding of the reasons behind those views. The exercise achieved the aim of gathering views from residents, businesses and visitors; and considerable insight into the views provided with 3,352 responses received (including hard copy and letter responses) supplemented by four webinar question and answer sessions and ten drop-in events held across the region. Answers to common questions received were also posted on the council website. Gaps in evidence The financial and economic appraisals have been carried out at the local authority level. Ideally the assessment would have included separate appraisals to better understand the potential implications for different parts of the region, including island communities. However, there are no data sources sufficiently detailed and robust to support and inform such an analysis. That said, there are key issues that will be captured for islands communities as part of this integrated impact assessment exercise. Knock on affect: Yes Knock on affect details The economic impact work has developed several possible scenarios ranging from the most positive (low costs, minimal impact on visitor numbers and high level of benefit from levy reinvestment) to the most negative (high costs, significantly negative impact on visitor numbers and no benefit arising from reinvestment of funds). Monitoring – How will you monitor the impacts of your proposal. Monitoring of the impacts will only be possible if a visitor levy scheme is introduced. If a visitor levy scheme is agreed at the full Argyll and Bute Council meeting on 24th
Page 3
September, taking into account the 18-month implementation period, the earliest a scheme will come into effect is 1st April 2027. As detailed in the Visitor Levy Guidance document (supports the Act), if a visitor levy scheme comes into force, for each12-month period following this decision, Argyll and Bute Council must prepare an annual report setting out: the amount of money collected; how the net proceeds have been used; and the performance of a scheme in relation to its objectives.
Page 4
Fairer Scotland Impact on service users Service users Impact Mainland rural population Positive Island population Positive Low income Don’t Know Low wealth Don’t Know Material deprivation Don’t Know Area deprivation Positive Socio-economic Positive Communities of place Positive Communities of interest Positive Impacts details Fairer Scotland Duty - the Fairer Scotland Duty, Part 1 of the Equality Act 2010, came into force in April 2018. The duty places a legal responsibility on public bodies in Scotland, such as Argyll and Bute Council, to pay due regard to (actively consider) how they can reduce inequalities of outcome, caused by socio-economic disadvantage, when making strategic decisions and how this has been implemented. The visitor levy will apply to visitors and tourists (subject to statutory exemptions) paying for overnight accommodation across various categories in the region and is designed to generate revenue for sustainable development of the visitor economy while addressing community needs. A key focus of a visitor levy that could be introduced across Argyll and Bute is on developing a scheme that would benefit visitors, residents and the visitor economy through ongoing investment. Such investment could support strategic events and festivals, provision of public toilets, maintenance of public parks and gardens, floral displays and green infrastructure, Live Argyll run swimming pools. sports centres and libraries, community tourism led projects, etc. that would all contribute to mitigate socio- economic disadvantage to create communities with sustainable employment opportunities based on a vibrant visitor economy.
Page 5
Impact on service deliverers Service deliverers Impact Mainland rural population Negative Island population Negative Low income Don’t know Low wealth Don’t Know Material deprivation Don’t know Area deprivation Don’t Know Socio-economic Don’t know Communities of place Positive Communities of interest Negative Impacts details The visitors and tourists accessing overnight accommodation (subject to statutory exemptions), various categories, across Argyll and Bute will need to pay a visitor levy if a scheme is introduced. As noted in the consultation report, the potential financial benefits for accommodation businesses range significantly from an overall loss of £47.9 million to a net gain of £109.2 million over 10 years. However, the mid-point scenario suggests a net gain of £23.5 million over the 10 years. If investment can support at least a 2% annual uplift in tourism sector activity, it is estimated that under any price elasticity of demand scenario and cost scenario that has been modelled, the levy may generate a positive impact on accommodation sector turnover/income. This will be dependent on the investment and time taken to realise an annual uplift in tourism activity. From the analysis undertaken, it is important to note that the cost benefit analysis provides insight into the impacts that a visitor levy may or may not have; it does not determine which scenario is more likely to occur. Don’t knows As noted, it is not clear at this stage if the introduction of a visitor levy will have impacts that will have a material impact on individuals' income and wealth and assist in alleviating material deprivation. Due regard As noted, if investment can support at least a 2% annual uplift in tourism sector activity, it is estimated that under any price elasticity of demand scenario and cost scenario that has been modelled, the levy may generate a positive impact on the local accommodation sector turnover/income.
Page 6
Consumer Duty Does your proposal affect individuals, businesses or both? Both On the basis of your assessment, what are the likely impacts of your proposal? Consumer Impact Choice Negative Fairness No Impact Redress Positive Safety No Impact Information Positive Access No Impact Representation No Impact Positive impacts you have identified The potential financial benefits for accommodation businesses range significantly from an overall loss of £47.9 million to a net gain of £109.2 million over 10 years. However, the mid-point scenario suggests a net gain of £23.5 million over the 10 years. If investment can support at least a 2% annual uplift in tourism sector activity, it is estimated that under any price elasticity of demand scenario and cost scenario that has been modelled, the levy may generate a positive impact on accommodation sector turnover/income. This will be dependent on the investment and time taken to realise an annual uplift in tourism activity. Negative impacts you have identified The analysis in the visitor levy consultation report presents accommodation and overnight visitor economy businesses in aggregate and the potential turnover losses and gains are assessed on a sectoral basis. It is possible that turnover losses due to the levy may be unevenly distributed across the region. This could have significant impacts on specific businesses and may result in closure of businesses who are particularly impacted. Similarly. business may be differentially impacted by investment in the sector and the potential benefits may not be evenly felt across the region. What alternatives have you considered which can improve outcome for customers and/or reduce harm? Argyll and Bute Council could consider applying local exemptions to a visitor levy scheme if introduced. It was clear from the consultation findings that a ‘one-size-fits-all’ approach to the consideration of local exemptions was not appropriate. Local exemptions from paying a levy, put forward by respondents, are as follows: • all residents of Argyll and Bute registered for Council tax. • people staying in Argyll and Bute on a temporary basis for business/work or non- leisure trips (e.g. works and tradespeople and NHS staff). • micro and small businesses that have consciously structured their business to remain below the £90,000 VAT threshold to avoid the complexity and costs associated with VAT compliance.
Page 7
• carers who accompany/support disabled people on holiday or essential trips and appointments. • charities and overnight stays for charitable purposes. How have you reduced harm to consumers through the development of your proposal? The only harm that will come to consumers from the introduction of a visitor levy is a currently 5% increase in the cost of overnight accommodation. However, from the consultation report, a visitor levy could have potential economic benefits (net additional Gross Value Added, GVA) for Argyll and Bute ranging significantly from an overall loss of £76.5 million to a net gain of £154.6 million over ten years. The mid-point is a positive Net Present Value of £28.5 million for investment back into the Argyll and Bute visitor economy. If you have not been able to reduce harm to your consumers, why not? Not applicable to answer.
Page 8
Children Rights and Wellbeing No Impact Justification It is not anticipated that the implementation of a visitor levy scheme across Argyll and Bute will affect the rights and wellbeing of children and young people up to and including the age of 18. Any relevant issues will be addressed through the detailed monitoring and annual reporting required if a visitor levy scheme for Argyll and Bute is introduced.
Page 9
Island Communities How many islands does your proposal affect? All islands across Argyll and Bute. Which islands are affected by your proposal? All 23 inhabited islands across Argyll and Bute would be subject to a visitor levy scheme if introduced by Argyll and Bute Council. Does your proposal impact on island communities? Island Community Impact Demography No impact Economy Positive Society Positive Describe any positive impacts you have identified The socioeconomic cost benefit analysis measures the present value of the net additional Gross Value Added (GVA) retained in Argyll and Bute because of investment of visitor levy generated funds against the present value of the direct costs to the Council plus the direct costs to accommodation business over the 10-year appraisal period. The potential economic benefits (net additional GVA) for Argyll and Bute as a whole range significantly from an overall loss of £76.5 million to a net gain of £154.6 million over ten years. The mid- point is a positive Net Present Value of £28.5 million to invest back into the visitor economy, and a proportion of that would be directed to islands businesses and communities. Describe any negative impacts you have identified Island communities within Argyll and Bute may experience unique economic challenges and benefits from the levy. While the additional revenue has the potential to enhance local infrastructure, support services, and sustainable tourism initiatives, there is also a risk that the levy may impact visitor numbers to these areas, particularly for cost-sensitive travellers. If visitor demand decreases, smaller island businesses could face a disproportionate economic impact compared to mainland operators. Strategic reinvestment of levy funds to support island-specific tourism will be essential to ensuring that these communities’ benefit from increased visitation rather than reduced demand. Describe how your proposal affects the islands communities you have identified differently from other communities including other islands communities and mainland areas Due to their limited resources and higher operational costs, island businesses may face greater challenges in meeting levy collection requirements.
Page 10
How will you ensure your proposal deliver equivalent levels of service to the islands communities you have identified compared to other areas, including mainland areas? Transporting supplies and addressing waste management are often costlier for island communities, so a visitor levy could support these unique needs, addressing infrastructure and services that directly impact both residents and visitors. This could include for example enhanced ferry services, improvements to ports and ferry terminals, waste management solutions, and upgrades to basic visitor facilities, which are critical to sustaining both the visitor economy and local quality of life. Consideration can be given to an exemption(s) for island communities and businesses that may mitigate any impact. A portion of the GVA retained would be directed to islands businesses and communities. If you have not been able to mitigate impacts, why not? See answer above. Will have more evidence to respond to this question if a visitor levy is introduced.
Page 11
Equality Impact Equality impact on service users Service users Impact Disability No Impact Race No Impact Marriage and civil partnership No Impact Religion or belief No Impact Sex No Impact Pregnancy and maternity No Impact Age No Impact Sexual orientation No Impact Gender reassignment No Impact Impact on service users A visitor levy scheme for Argyll and Bute has the potential to generate significant benefits for the local economy, community aspirations, culture and heritage, and tourism infrastructure while promoting sustainable tourism practices. However, a visitor levy scheme could introduce new administrative burdens for both businesses and the council, with challenges for island communities that face unique economic and infrastructure constraints. Support for tourism related SME businesses, effective communication, transparent, user- friendly systems, and a clear demonstration of how the levy benefits both visitors and residents will be crucial in ensuring a scheme’s success. Ensuring the fair allocation of funds to address the distinct needs of island communities, alongside proactive monitoring and adjustments to a visitor levy scheme, will be essential to mitigate any negative impacts on tourism businesses, communities, and visitor experiences throughout the region. Don't knows identified The analysis presents accommodation and overnight visitor economy businesses in aggregate, and the potential turnover losses and gains are assessed on a sectoral basis. It is possible that turnover losses due to the levy may be unevenly distributed across the region. This could have significant impacts on specific businesses and may result in closure of businesses who are particularly impacted. Similarly. businesses may be differentially impacted by investment in the sector, and the potential benefits may not be evenly felt across the region. It is important to note that the cost benefit analysis in the consultation report provides insight into the impacts that a visitor levy may have; it does not determine which scenario is more likely to occur. If a visitor levy is introduced, these "don't knows" will be addressed on an ongoing basis during the implementation period.
Page 12
Equality impact on service deliverers Service deliverers Impact Disability No Impact Race No Impact Marriage and civil partnership No Impact Religion or belief No Impact Sex No Impact Pregnancy and maternity No Impact Age No Impact Sexual orientation No Impact Gender reassignment No Impact Impact on service deliverers There is no impact on service deliverers regarding the nine ‘protected characteristics’ covered by the Equality Act (2010). Argyll and Bute Council could consider local exemptions regarding paying a visitor levy when accessing overnight accommodation. It was clear from the consultation findings that a ‘one-size-fits-all’ approach to the consideration of local exemptions was not appropriate. Local exemptions from paying a levy, put forward by respondents, are as follows: • all residents of Argyll and Bute registered for Council tax. • people staying in Argyll and Bute on a temporary basis for business/work or non- leisure trips (e.g. works and tradespeople and NHS staff). • micro and small businesses that have consciously structured their business to remain below the £90,000 VAT threshold to avoid the complexity and costs associated with VAT compliance. • carers who accompany/support disabled people on holiday or essential trips and appointments. • charities and overnight stays for charitable purposes. Don't knows identified The analysis presents accommodation and overnight visitor economy businesses in aggregate, and the potential turnover losses and gains are assessed on a sectoral basis. It is possible that turnover losses due to the levy may be unevenly distributed across the region. This could have significant impacts on specific businesses and may result in closure of businesses who are particularly impacted. Similarly. businesses may be differentially impacted by investment in the sector and the potential benefits may not be evenly felt across the region It is important to note that the cost benefit analysis in the consultation report provides insight into the impacts that a visitor levy may have; it does not determine which scenario is more likely to occur.
Page 13
If a visitor levy is introduced, these "don't knows" will be addressed on an ongoing basis during the implementation period. Due regard Equalities (protected characteristics) - all activities aligned to a visitor levy scheme will comply with all Equal Opportunities policies and obligations.