The Scottish government has advised officials in the Highlands to pause the introduction of a “tourist tax”.
The Highland Council proposed a five per cent visitor levy on holiday accommodation, which it estimated could raise annual funds of around £10m for the region.
The “tourist tax” would be charged per room per night for accommodation in the region only.
Now government officials have advised Highlands authorities to press pause on the initiative after announcing plans to give local authorities greater flexibility around visitor levies.
In a report to councillors, government officials said accommodation providers had raised “considerable” concerns about a percentage-based tax.
Chambers of Commerce in Cairngorm, Caithness, Inverness and Lochaber expressed concern that the extra cost could discourage visitors to the region.
A statement published online by the Scottish government said new proposals would give councils the choice of setting a fixed amount instead, rather than a percentage, including the option to set different fixed amounts for different geographical locations, times of year and types of accommodation.
The legislation will also clarify how levies are applied to sales via third parties, such as booking platforms, and the information accommodation providers must share with councils.
Public finance minister Ivan McKee said: “The visitor levy empowers councils by giving them a new way to raise money for investment in tourist services and facilities.
“Our aim has been to give councils the flexibility to design a levy that works for their areas, while ensuring businesses can easily understand what it means for them.”
The bill is intended to be introduced in early 2026.
If the new bill is passed, local authorities may choose to introduce a visitor levy that is based on either a percentage rate model or a fixed amount model.
The Visitor Levy (Scotland) Act was passed in May 2024 and enables councils to add a charge to overnight accommodation such as hotels, B&Bs and holiday lets.
Under the current rules, councils can add a charge to overnight accommodations.
Councillors will consider the recommendations at a meeting tomorrow Thursday 11 December.
Read more: UK tourists taxes – where are they charged and how much do they cost?
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