Edinburgh City Council Seeks VAT Rebate on Visitor Levy Funds

Edinburgh wants money back from the UK Treasury. This involves the city’s new visitor levy. The levy could bring in around £50 million each year. About £8 million of this might go to the UK government as VAT.

A councilor asked the leader to write to the government. She wants the VAT money returned to Edinburgh. The levy should fund local projects, she said. VAT decisions rest with the central government though. There were VAT talks during the levy’s passage.

Parliament can’t change VAT rules, it’s a UK matter. The council asks for a rebate on the VAT amount. This 20% VAT equals about £8 million each year. The councilor emphasized the money’s importance over time. It could fund housing or other local needs.

It shouldn’t be a “Treasury bonus,” she stated. The levy effectively taxes a tax. Edinburgh’s visitor levy is the UK’s first. Most visitors will pay 5% per night, up to five nights.

£5 million yearly would fund housing and “tourism mitigation.” £2 million spread over three years aids local budgeting. About 2% goes to accommodation providers. This covers their administrative expenses. The remaining funds benefit the city.

55% funds operations and infrastructure. 35% goes to culture, heritage, and events. 10% supports visitor management. The levy got formal approval in January. It starts in July 2026.

One councilor mentioned a previous proud discussion. Now, the group is questioning the same plan. The group designed and approved the plan earlier.
The councilor replied, action is straightforward. Edinburgh wants the money raised and spent locally. The law can always improve, she said.
The government has power to act. This action would help residents.