Scotland’s councils need clarity about how they will be expected to pay for the costs of implementing Scotland’s new tourist tax, the Chartered Institute of Taxation (CIOT) has said.
In written evidence to a Scottish Government consultation on proposals to give councils the power to introduce a Transient Visitor Levy1, the CIOT called on the Scottish Government and the Convention of Scottish Local Authorities (COSLA) to ensure that the potential costs associated with administering and policing the levy were included in any future budget negotiations.
The Institute said this clarity was needed to ensure councils and the tourism industry were compliant with any future levy, adding that funding could be needed to ensure:
- Councils can identify which properties to include on a register of properties rented commercially
- The availability of appropriate systems – and council staff – to process and verify tax returns
- The capability of councils to raise awareness of the tax through communications campaigns, and to ensure that the tourist industry complies with the rules underpinning the tax
- The ability to levy penalties against those found to be in breach of the rules
The CIOT added that its preference was for the Scottish Government to establish a national framework for operating the levy, providing guidance on how councils should administer the tax.
This would make the tax easier to operate across Scotland, reduce burdens on businesses and make it easier for visitors to understand. It would also respect the independence and autonomy of councils to make their own decisions on whether they would choose to implement the tax and the amounts they would charge.
Alexander Garden, chair of the Chartered Institute of Taxation’s Scottish Technical Committee, said:
“If councils are going to be given the power to levy taxes on tourists, then we think it is important that they know from the outset how they are going to be expected to pay for its operation.
“The consultation is silent on where the resources for administering and policing the tax would come from. Theoretically, this could come from existing council budgets, from a proportion of the money raised from the tax or from extra funding from central government.
“A nationally designed framework for operating the tax, providing clear guidelines on how the tax will be designed and what will be taxable, should be relatively straightforward to operate, even if individual councils choose to set different rates.
“But at a time when council budgets are already stretched, the Scottish Government and COSLA need to ensure that the costs of implementing the tax are included as part of future budget negotiations”.
Notes for editors
1. A copy of the CIOT's response can be accessed here.
2. A picture of Alexander Garden can be downloaded via the following link.
3. The Chartered Institute of Taxation
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient tax system for all affected by it - taxpayers, their advisers and the authorities. The CIOT's work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
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