Visitor Levy Bill: business and regulatory impact assessment

5. Regulatory and EU Alignment Impacts

5.1 Intra-UK trade: Is this measure likely to impact intra-UK trade?

5.1.1 Part 1 of the United Kingdom Internal Market Act 2020 sets out market access principles of mutual recognition and non-discrimination for the treatment of goods traded across the UK. Part 2 of the United Kingdom Internal Market Act 2020 sets out market access principles of mutual recognition of authorisation requirements and discrimination in the regulation of services.

5.1.2 Under Part 2 of the Act, the mutual recognition principle provides that a person authorised to perform a service in one part of the UK may not need a separate authorisation to perform that service in another part. An authorisation requirement is a legislative requirement (a requirement imposed by, or by virtue of, legislation) that a service provider must have the permission of a regulator to provide services.

5.1.3 The potential requirement for some accommodation providers operating in specific local authorities in Scotland to charge, collect and remit a visitor levy will be a new requirement for these businesses that will not exist in other parts of the UK. If an accommodation provider operating in an area where a visitor levy is imposed does not comply, they may be subject to enforcement action which would not be the case elsewhere in the UK.

5.1.4 Although this does create different charges and possible impacts, Schedule 2 of the Act lists taxation as an authorisation requirement to which mutual recognition does not apply.

5.1.5 Similarly, the principle of non-discrimination provides that a regulatory requirement will be of no effect in relation to an incoming service provider where it discriminates against that provider directly or indirectly. As the visitor levy will be applicable to all accommodation providers offering commercial accommodation in a defined area, the treatment of existing and incoming businesses will be similar. Regardless, Schedule 2 of the Act also lists taxation as an authorisation requirement to which non-discrimination does not apply.

5.1.6 Although we recognise that the powers within the Bill will, if used by local authorities, potentially introduce some additional requirements for accommodation providers that do not exist elsewhere in the UK, we do not anticipate any impact on intra-UK trade or that the Bill will be in conflict with the principles set out in the Internal Market Act given the specific exemptions for authorisations linked to taxation.

5.2 International trade: Does this measure have the potential to affect imports or exports of a specific good or service, or groups of goods or services?

5.2.1 Accommodation services provided to visitors can be thought of as an example of a non-tradeable good/service, as the demander (the visitor) and producer (the accommodation provider) must be located in the same location. As the provision of commercial services in a particular place cannot be traded internationally, we do not consider the Bill will have an effect on any imports or exports of goods or services.

5.3 EU alignment: Is this measure likely to impact on the Scottish Government's policy to maintain alignment with the EU?

5.3.1 As stated elsewhere in the BRIA, the existence of local taxes on visitors using commercial accommodation are common across the European Union. Therefore, we do not anticipate that the bill will have any impact on the Scottish Government's policy to maintain alignment with the EU.