Chamber and committees

Exceptions. Sorry—I am getting ahead of myself here.

It will depend on which schemes are chosen to be implemented locally, which will have a bearing on the costs. It is also worth bearing in mind our earlier discussion about simplifying the scheme. That would lead to the costs for businesses being lower as a consequence of the amendments in the bill than they would otherwise have been had flexibility and simplicity not been available to them.

There has been engagement on the financial memorandum, and I will let officials talk about the level of that engagement.

Thank you for the opportunity to set out the purpose of the Visitor Levy Amendment (Scotland) Bill, how it will deliver enhanced flexibility for local authorities by introducing an additional basis of charge, and how it will support the practical implementation of local schemes through further provision relating to third-party arrangements and returns. I will also outline the purpose of the three sets of regulations that are being considered under the affirmative procedure alongside the bill today.

I am grateful to the committee for its consideration of the bill and the accompanying regulations, and for the constructive engagement with the Convention of Scottish Local Authorities, local authorities and industry throughout the process. I understand that the committee heard from key stakeholders on 27 January. I will reinforce some of the points that were heard as part of that and will highlight the key measures in the bill.

The bill will make additional provision in respect of certain third-party sales arrangements, reflecting the operational issues that have been raised by local authorities and industry. I recognise that progressing the legislation at pace presents challenges, but I am confident that, with appropriate support and proportionate scrutiny, we can work together to ensure that the system works for all local authorities while maintaining clarity for businesses and visitors.

The bill as introduced builds on the existing powers that allow councils to charge a visitor levy, which are set out in the Visitor Levy (Scotland) Act 2024. It is intended to introduce positive changes. Its key measures include introducing new flexibilities, making further provision on chargeable transactions, making adjustments to returns, and introducing regulation-making powers.

I will take each of those in turn. The introduction of new flexibilities will allow local authorities to design and implement a visitor levy model that is right for their local area—for example, a scheme that is based on a fixed amount or a range of different fixed amounts as an alternative to a percentage-based model. Those fixed amounts may be tailored towards accommodation type, size, location or season. The purpose of the legislation is to strengthen the range of options that is available to local authorities, so that they can design a model that works for their areas. We will also look to build on the legislation by providing updated statutory national guidance for local authorities, in order to ensure that the levy is understandable for visitors.

The bill will make further provision for circumstances in which overnight accommodation is first sold to a third party for onward sale, ensuring clarity for local authorities and providers operating such arrangements. That flexibility is important.

The bill will make an adjustment to the returns that are to be made by accommodation providers, so that they relate to the period in which liability for the levy arises.

The regulation-making powers will help to provide a mechanism for future proofing the visitor levy framework by ensuring that further operational regulations can be brought before the Parliament if needed. The suite of three sets of regulations demonstrates how primary and secondary legislation will work together to support implementation. The regulations provide operational detail that is based on the powers in the 2024 act. Although they have not been the subject of a stand-alone consultation, their content reflects feedback that was gathered during wider engagement with COSLA, local authorities and industry throughout the development of the visitor levy framework.

Turning to the three sets of regulations, I remain committed to delivering a framework for a well-managed visitor levy that works in the interests of visitors, local residents, local authorities and industry. These regulations will support that process.

The Visitor Levy (Local Authority Assessment) (Scotland) Regulations 2026 will ensure that the visitor levy is administered fairly, transparently and in a way that supports compliance. They set out the notice that a local authority is to give of its intention to make its own assessment of the visitor levy payable, what will happen once that assessment has been carried out, and the circumstances in which the outcome of an assessment may be altered.

The Visitor Levy (Reviews and Appeals) (Scotland) Regulations 2026 will ensure that the process of a review of local authority assessments and decisions on visitor levies is clear and transparent, as the measures include specifying the manner in which local authorities must conduct such reviews, the process for bringing an appeal before the First-tier Tribunal for Scotland and the actions that local authorities must take following the disposal of an appeal.

The Visitor Levy (Scotland) Act 2024 Amendment Regulations 2026 will extend the exemption. That means that the levy will not be payable or may be reimbursed where a visitor is entitled to certain disability or health-related benefits, allowances or payments, so that it applies to a wider range of payments.

Overall, the measures in the bill and in the regulations are part of our vision for the visitor levy in Scotland, which aims to improve visitor services, without adversely impacting on the local economy or placing a financial burden on local residents, as we look to share the unique experience of our history, culture, landscapes and warm hospitality.

I will continue to listen to the information that is shared by stakeholders and the committee, and I am happy to reflect on any recommendations that are made. My officials and I look forward to answering any questions that you may have on the bill and the regulations.

10:15

Officials might want to comment on that but, to my mind, the powers give us the ability to deal with unintended consequences. If you were going to ask me about possible scenarios, I could not tell you what they might be, because they are unknown unknowns at this point. If we look at the history and why we are here, we can see that everybody looked at the matter in a lot of detail in the run-up to the 2024 act, but there are clearly unintended consequences that we are working through now. Where those are minor, the regulation-making powers give us the ability to go through a process and make changes without having to produce more primary legislation.

Yes.

No. Local authorities have the ability to add further exemptions if they decide that that makes sense locally. That is the right approach, because it gives them that flexibility. The regulations are about a technical issue in the disability exemptions, which clarifies the definition of the scope. David Storrie might want to talk to that.

Officials can keep me right on the technicalities, but local authorities have the ability to do that themselves. In the scenarios that you are painting, local authorities would have that power, and they will be able to judge whether they want to use that locally.

The purpose is to attract more investment into Scotland in relation to property.

We do not know, because obviously no transactions are happening at the moment. The Scottish Fiscal Commission has said that it is below the materiality threshold, which is £5 million. However, in effect, we will not know until it is removed and those transactions start taking place.