Several Scottish councils now charge a Visitor Levy (VL) on overnight stays. Edinburgh was the first to confirm its levy, and it’s since been followed by Glasgow, Aberdeen, Stirling, and West Dunbartonshire each council can set different VL rates. 

Freetobook is based in Scotland, so we have naturally implemented all the required technology to make your accommodation compliant. 

If you sell accommodation in these areas, here’s what you need to know and how to calculate it correctly.  

The basics (what you must do by law) 

A few important rules to be aware of: 

• The Visitor Levy must be included in the price you show to guests. You can’t add it on later and you need to show the amount of the levy. 
• Your advertised price must include everything; accommodation, Visitor Levy, and VAT (if you’re VAT– registered). 
• You must be able to explain how the levy has been calculated if asked. 
• If you’re VAT registered, VAT also applies to the Visitor Levy.
• If a prepaid booking is cancelled, the Visitor Levy must be refunded in full. 

What applies in Edinburgh?

For accommodation in Edinburgh: 

• Applies to bookings made on or after 1 October 2025 
• For stays taking place from 24 July 2026 onwards 
• The levy is 5% of the accommodation price 
• It’s capped at five nights per stay 
• It doesn’t apply to extras like parking, meals, drinks, or transport 

A simple example (VAT-registered businesses) 

In the UK, accommodation prices are always shown including VAT. The same applies to the Visitor Levy; your price must include everything. 

Let’s say the advertised room rate is £126. That £126 already includes: 

• Accommodation 
• Visitor Levy 
• VAT 

Here’s how it breaks down. 

Behind the scenes: 

• Base room rate: £100 
• Visitor Levy (5% of £100): £5 
• VAT at 20%
• £20 on the accommodation 
• £1 on the Visitor Levy 
• Total VAT: £21 

Which gives you: 

• £100 (room) 
• £5 (Visitor Levy) 
• £21 (VAT)
  = £126 total price 

That £126 is exactly what the guest sees and pays. So, how much Visitor Levy is in that £126 for VAT-registered accommodation? When everything is wrapped into one price, the Visitor Levy works out at 3.96944% of the total rate. 

• £126 × 3.96944% = £5 Visitor Levy 

That £5 is what you pass on to the council. 

And how do you spot the VAT in an inclusive price? 

A handy rule of thumb: 

• To find the VAT included in a VAT-inclusive price, take 16.6666% of the total. 

So: 

• £126 × 16.6666% = £21 VAT 

That £21 includes VAT on both the room and the Visitor Levy. 

What guests should see when booking 

From the guest’s point of view, this should be simple: 

• One clear, all-in price 
• Itemised VAT and Visitor Levy 
• No surprise charges later 
• Confirmation that the price includes: 
• Visitor Levy 
• VAT (where applicable) 

This is important because accommodation must be sold at an inclusive rate. 

In short 

If your advertised price is £126: 

• £100 is your room rate 
• £5 is the Visitor Levy 
• £21 is VAT 

Everything is included, everything is transparent and itemised, and you’re fully compliant. 

What if you’re not VAT-registered? 

If your accommodation is not VAT-registered, the calculation is much simpler, but the same pricing rules still apply. 

You still must include the Visitor Levy in the price shown to guests. The difference is that no VAT is added to either the accommodation or the levy. If your price is £120 it must have a Visitor Levy included. 

Breaking that down for you: 

£120 + £6 (VL) = £126 

So, where you have a selling price of £126, the quick way is to take 4.761904%:

£126 x 0.0476190 = £6 which is the VL included. 

Remember also that if you’re not VAT-registered, the levy still counts towards your taxable turnover. If the combined total of your accommodation charges and levy collections takes you over the VAT registration threshold (currently £90,000), you may be required to register for VAT. 

This information is brought to you by freetobook; a Scottish technology company supporting accommodation providers with simple, reliable tools to help manage their businesses better.