Whilst the management of the implementation of any Tourist Visitor levy is a devolved matter – to be considered by each the Scottish Parliament and the Welsh Senydd separately, the administration of VAT is a UK Government managed tax. As each administration therefore considers how it will implement this new levy the hospitality sector still waits for news on the practical impact it will have on them – how to charge it – is it part of their business income – is VAT due on the charge? being just some of those questions.
In the context of the Levy plans in Scotland, the Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants Scotland (ICAS) have kindly shared an open letter to the Scottish Government following their meeting with HMRC VAT Policy in May – here.
The responsibility to account for the Scottish Visitor Levy currently sits with the accommodation provider and would appear to result in UK VAT being accounted for on what is, a local levy – the revenue from the levy resting with the devolved administrations. Concerns have also been expressed in that the addition of the levy charge to the businesses turnover would push many small hospitality providers over the VAT registration threshold as an unintended consequence – adding to the costs of their business administration.
There is no current news from Wales as to its plans in regard to the levy there but from the business community there would likely be a request for consistency across the UK.
