Scottish visitor levies: rates, VAT and booking records

In short: Edinburgh's 5% visitor levy has been live since 24 July 2026. Glasgow (5%, 25 January 2027), Aberdeen (7%, 1 April 2027), Stirling (3%, 14 June 2027) and West Dunbartonshire (5%, 1 July 2027) are approved. Highland is consulting on a tiered fixed-amount seasonal scheme with an earliest go-live of mid-2028. For VAT-registered providers, the levy passed on to a guest forms part of the accommodation supply for VAT purposes — Edinburgh Council's guidance is explicit on this. The initial-transaction rule for OTA bookings was updated by July 2026 amendments to the Visitor Levy (Scotland) Act 2024 asp 8; Edinburgh's August 2026 provider guide sets out the practical position.

The Visitor Levy (Scotland) Act 2024 (asp 8) gave each Scottish local authority the power to introduce a per-night charge on paid overnight accommodation. Edinburgh moved first. Others follow. For an STL operator the levy is one of the more operationally awkward taxes — the calculation, the initial-transaction rule and the record-keeping obligations are all specific.

Approved schemes

Where a council has approved a scheme, the stay-start date, the advance-booking cut-off date and the rate structure all matter. The table below gives current published detail; the accompanying source links carry the technical detail.

In consultation

Highland is consulting on a draft tiered fixed-amount seasonal scheme. The consultation opened on 7 September 2026 for 12 weeks and closes around 30 November 2026. Full Council decides on 10 December 2026. Proposal: £5 per room/area per night for hotels, guest houses, B&Bs, rooms in houses, short-term lets and similar; £2 per room/area per night for hostels and campsites; the scheme is seasonal (nine months, excluding December to February). Earliest go-live is mid-2028 (Highland Council — tiered fixed-amount visitor levy consultation).

VAT — Edinburgh's guidance and the Welsh comparison

Edinburgh Council's August 2026 provider guide confirms that the visitor levy should be included as turnover and, for VAT-registered providers, is liable for VAT. HMRC has not published its own separate guidance on the point; the position endorsed by CIOT and ICAS in joint correspondence with the Scottish Government in 2025 is that the levy is within the scope of VAT where a VAT-registered provider passes it on to the guest.

Wales adopts the same position. The Welsh Government's guidance for accommodation providers says: "VAT applies to the total amount visitors pay for their stay. This includes Visitor Levy if you pass its costs on." Scotland and Wales are aligned on VAT — earlier commentary suggesting the two positions differ was wrong.

Threshold effect. For an unregistered operator, the levy passed to guests counts towards the £90,000 VAT registration threshold. A self-caterer at £85,000 of accommodation turnover collecting a 5% Edinburgh levy is close to £89,250. Model the position before the busy quarter.

Fixed vs percentage rate does not, by itself, resolve the VAT turnover question. Where the fixed charge is passed on to the guest as part of the price paid for the accommodation, it forms part of the consideration for the supply on the same principle. The reduction in complication from a fixed rate is on the calculation and the OTA commission question, not on the VAT threshold.

The initial-transaction rule for OTA bookings

The July 2026 amendments to the Act clarified that the chargeable transaction is the initial transaction for the accommodation. Edinburgh's August 2026 guide sets out the practical positions:

• Genuine resale by an OTA — the OTA has acquired the accommodation from the provider under a contract (typically a wholesale allocation) and re-sells it to the visitor on the OTA's own terms. The initial transaction is the provider-to-OTA contract; the levy is calculated on the accommodation price agreed in that contract, not on the price the OTA subsequently charges the visitor. This is the distinction that matters for how much levy the provider actually accounts for.
• Agent-with-commission arrangement — the OTA acts as an intermediary and the accommodation is supplied by the provider to the visitor with the OTA taking commission. The initial transaction is between the provider and the visitor; the levy attaches to that transaction. Whether commission is included in the accommodation portion depends on the specific arrangement.

The old "gross vs net" framing does not capture the distinction. The right question is who is supplying the accommodation to the visitor and on what terms. Corporate stay arrangements are covered by worked examples in the Edinburgh guide — long-stay corporate contracts are not an entirely unresolved area.

Bookings that straddled the 1 October 2025 commencement window

Edinburgh's exception carves out bookings where a tangible, non-refundable payment attributable to specified accommodation — with the specified dates, rooms and nightly price identified — was made before 1 October 2025. It is not enough that the booking was placed before that date; there has to have been a real, attributable payment against the specific stay. Separately, any stay that commences before 24 July 2026 is outside the levy even if it finishes on or after that date; the levy attaches to stays starting on or after the go-live date.

The decision test:

Amendments and refunds:

• Booking modified after 1 October 2025 (dates changed, party size changed) — the guide treats the modification's effect on the price and the levy depending on the nature of the change. A price increase attributable to specified accommodation is generally a new chargeable transaction for that increase.
• Refunds — where a stay does not take place and the payment is refunded, no levy is due on the cancelled portion.
• Multi-year corporate reservations for the Festival period — turn on when the actual non-refundable payment was received, not on when the reservation was originally struck.

Keep booking-date, payment-date and stay-date evidence for every reservation into 2026 and 2027 — the pre-cutoff exception is the most common single point of dispute.

Immediate Edinburgh compliance dates

The first Edinburgh accounting period runs from 24 July 2026 to 30 September 2026. Providers must submit the quarterly return by 31 October 2026 and pay the levy by 13 November 2026. Subsequent quarters follow the pattern set out in the council's provider guide for each period; verify each period's return and payment dates on the specific notice rather than working off a general rule of thumb.

The 2% administrative retention is applied on the levy amount collected, not on the accommodation price. On £1,000 of levy collected the provider retains £20 and remits £980. The retention is separate from the calculation of the levy itself and does not reduce the amount shown to the visitor.

The bookkeeping entry, in one place

For a VAT-registered Edinburgh provider taking a £200 (pre-VAT) accommodation booking directly, applying the 5% levy (£10 for a single-guest single-night booking) and 20% VAT:

• Dr Bank / Debtor £252.00
• Cr Accommodation income £200.00
• Cr Visitor levy payable — City of Edinburgh Council £10.00
• Cr Output VAT £42.00 (20% on £210 = £200 + £10 levy)

Reconcile levy payable by reporting period. For the period being settled, reduce the balance by (a) the payment to the council and (b) any permitted retention recognised separately to income. Once that period is fully settled and adjusted, its liability should clear to zero; unpaid amounts for other reporting periods may remain in the account. The same retention cannot both have been released to income and remain on the payable account. Guest charge, output VAT and provider levy obligation all sit on the same booking and need to reconcile back to the sum the guest paid.

What operators should do

1. If you operate in Edinburgh, reconcile every payout against your bookings for the levy component from 24 July 2026 onwards. The platform payout will not always identify the levy portion separately.
2. For VAT-registered providers, include the levy passed to guests in the VAT calculation on the accommodation supply. Scotland and Wales are aligned on this. Do not treat the levy as outside the scope of VAT.
3. Keep both booking-date and payment-date evidence for every reservation — the straddled-window rule turns on both.
4. Identify the initial transaction for each OTA booking — resale by the OTA and agent-with-commission arrangements are treated differently. Where the arrangement is unusual, check the specific platform's contractual position and Edinburgh's guide conditions before signing off the calculation.
5. If you operate in Highland, respond to the consultation before 30 November 2026. Full Council decides on 10 December 2026; earliest go-live is mid-2028.
6. Set up a separate levy liability account in your bookkeeping. The levy amount collected on behalf of the council is a liability, not income.

Our view on scheme design

We think a fixed per-night rate is a materially simpler model than a percentage of accommodation cost, for the same reason mature European tourist taxes such as those in Paris, Rome and Barcelona have generally taken that route (Amsterdam is the notable exception, running a 12.5% percentage levy). A fixed rate simplifies the calculation, removes the initial-transaction question for OTA bookings, and eases reconciliation.

That said, a fixed rate does not, by itself, remove the VAT-turnover position where the charge is passed on to the guest. On the operational reconciliation side the improvement is real; on the VAT side the same underlying analysis applies.

The Highland proposal is the fixed-rate scheme currently on the table. Edinburgh, Glasgow, Aberdeen, Stirling and West Dunbartonshire have all chosen percentage models. For portfolio operators across multiple Scottish authorities, the resulting patchwork will take more administration than the underlying tax raises for either the operator or the council.

Book a free consultation to talk through your position.

Sources: Visitor Levy (Scotland) Act 2024 (asp 8); Edinburgh Council — Visitor Levy provider guide (August 2026); Edinburgh Council — Scheme for the Edinburgh Visitor Levy; VisitScotland — Local Authority Guidance on the Visitor Levy; Glasgow City Council — Visitor Levy Scheme User Guide; Aberdeen City Council — Introducing the Aberdeen Visitor Levy; Highland Council — tiered fixed-amount visitor levy consultation; Welsh Government — Visitor Levy for accommodation providers; CIOT — Scottish Visitor Levy VAT position; ICAS — Visitor Levy VAT concerns.