Lets licensing a “stealth tax” on small business

A leading tourism organisation has slammed the Scottish Government’s controversial short-term lets licensing scheme, branding it a “stealth tax”.

The Association of Scotland’s Self-Caterers also believes the new scheme will hit rural communities hardest as they struggle to recover from the economic impact of Covid.

The Scottish Government is pressing ahead with its plans to introduce a licensing system for self-catering, despite opposition from tourism bodies and Highland Council.

Ministers want to tackle the surge in short-term lets and Airbnb-style rentals in tourist hotspots such as Edinburgh and better balance the concerns of communities with tourism benefits.

But many tourism organisations say the impending licensing legislation is the wrong model and want the government to opt for a more flexible and business-friendly form of registration.

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This week the ASSC, the trade body which represents the self-catering sector, said there was no evidence for the Scottish Government’s claims that the scheme would help alleviate the housing crisis faced by many communities in Scotland.

In what the association previously described as a “perfect storm”, it said the multi-million-pound Scottish self-catering sector now faced continued uncertainty from Covid, exacerbated by “damaging” proposals like licensing and control zones.

ASSC Chief Executive Fiona Campbell has described the scheme as a “stealth tax”

ASSC chief executive Fiona Campbell said: “While this policy is littered with mistakes – the biggest one is in the name – this isn’t really a licensing scheme, it’s a stealth tax on Scottish businesses, especially those in rural areas.

“Many people running legitimate businesses in Scotland’s countryside feel that this Scottish Government does not consider them to be a priority and this ill-considered and damaging stealth tax will do little to change that view, nor will it garner support for any further regulatory burden such as a Transient Visitor Levy.

“Rather than continuing to curate this perfect storm of unfortunate circumstance and wrong-headed regulation, the Scottish Government should drop this scheme and work with the small businesses that will be crucial in our recovery and future prosperity.”

Last year, four tourism organisations resigned from the Scottish Government’s working group on short-term lets, claiming the scheme was “not fit for purpose”. They were the ASSC, Airbnb, the Scottish B&B Association and the UK Short-Term Accommodation Association.

Local authorities will each have to devise a licensing system for short-term rental properties by October, with all operators then required to apply for a licence by July 2024.

Article by Jackie MacKenzie.