Edinburgh Council approves penalties for hotels and holiday lets that don't charge tourist tax

Hotels and holiday lets that fail to comply with the council’s visitor levy will face stiff penalties under plans approved by councillors.

But enforcement would be a last resort, with the council taking an ‘engage, explain, encourage and enforce’ approach to accommodation providers flouting the rules.

Council leader and Labour councillor Jane Meagher hailed the ‘softly softly’ approach as one that would not sting firms that unknowingly breached the rules.

Edinburgh’s visitor levy, a 5% tax on overnight stays, charged for the first five nights of a stay, will be the first in Scotland when it launches on July 24.

Short-term lets which fail to submit financial reports to the council will be charged 10% the value of their property’s council tax after one month of delay, once enforcement is taken up.

After six months, it will step up to 50% of the property’s council tax value, and after a year it will climb to 100%.

For hotels, and other accommodation not subject to council tax, the penalty will start at 1% of rateable value, climbing to 2% after six months and 5% after a year.

According to a report before councillors at Tuesday’s policy committee meeting, the penalty for a 12 month delay for an individual short-term let would likely cost between £1,084 and £3,893.

Meanwhile, for properties not subject to council tax, the draw would likely be anywhere between £405 to £49,350.

The same rates as a 10% delay will be charged for a failure to keep and preserve records, and for ‘penalty for failure to comply or obstruction’.

Daily penalties for failure to comply with or attempts to obstruct the scheme would be £200 for any properties.

Meanwhile, interest on unpaid levy fees and penalties would be 2.5% above the Bank of England’s interest rate.

Cllr Meagher said in full: I think the softly softly approach is a really good basis to move forward, one that doesn’t antagonise unnecessarily but achieves the outcome we as the council wish to.