Scottish Highlands advised to pause tourist tax after business concerns – all you need to know

The Scottish government pauses the Highland tourist tax, exploring flexible levy options to balance sustainable tourism and support local businesses.

The Scottish Highlands, renowned for their rugged landscapes and cultural heritage, have been grappling with overtourism in recent years. To address mounting pressures on local infrastructure and natural resources, the Highland Council had proposed a tourist levy on overnight stays. However, the Scottish government has now recommended pausing the plan after local accommodation providers and businesses voiced concerns, signalling a shift toward a more flexible and inclusive approach to managing visitors.

The Highland Council initially suggested a five per cent levy on overnight stays in hotels, B&Bs, and holiday lets. The tax aimed to raise around £10 million annually to improve tourism infrastructure and services across the region. The initiative was part of a broader effort to tackle overcrowding at popular sites, preserve the natural environment, and ensure the Highlands remain a sustainable destination for future travellers.

Despite the potential benefits, many local businesses, especially smaller operators, warned that a percentage-based tax could make the region less competitive. Chambers of commerce in Cairngorm, Caithness, Inverness, and Lochaber highlighted that additional costs might discourage budget-conscious tourists and impact international visitor numbers. Businesses also raised concerns about the levy disproportionately affecting smaller enterprises already operating on tight margins.

In response to these concerns, the Scottish government advised pausing the original plan. The revised approach allows local authorities to adopt a more flexible levy system, such as fixed charges per night or varying rates depending on the season, accommodation type, or location. This flexibility aims to balance revenue generation for tourism improvements with minimal impact on businesses and visitors.

Public finance minister Ivan McKee emphasised that the goal is to create a visitor levy system that is clear, fair, and tailored to local needs, as per reports. The government hopes the approach will provide sustainable funding for tourism development while avoiding unnecessary strain on the sector.

The pause in the tax also reflects Scotland’s broader commitment to sustainable tourism. With visitor numbers continuing to rise, officials are prioritising strategies that protect the environment, reduce overcrowding, and maintain a high-quality experience for both residents and tourists. The proposed levy was designed to reinvest in tourism infrastructure, highlighting the need for a careful balance between economic growth and environmental preservation.

Under the new approach, councils may explore different models, such as fixed nightly fees, seasonal rates, or targeted charges for luxury accommodations and short-term rentals. Local authorities, accommodation providers, and tourism stakeholders will continue consultations to ensure the levy is fair, transparent, and beneficial across the Highlands, including rural and less-visited areas.

While the pause in implementation delays the original plan, it opens the door for a more collaborative and thoughtful framework for tourism management. By incorporating stakeholder feedback and flexible levy options, the Scottish government aims to ensure the Highlands remain a top destination while safeguarding local communities and natural heritage.

With careful planning and consultation, the region can continue welcoming visitors without compromising sustainability, striking a balance between economic growth and preserving the unique charm of the Scottish Highlands.