The visitor levy and VAT
Work the levy out on the price before VAT. If you are VAT-registered, the levy itself also carries 20% VAT.
A worked example
One night, £100 before VAT, in Edinburgh, from a VAT-registered provider. This matches the council’s published example.
| Room, before VAT | £100.00 |
|---|---|
| Rate | 5% |
| Levy | £5.00 |
The guest pays the room and the levy, with VAT on both: (£100 + £5) × 1.2 = £126.00.
Not VAT-registered
Then there is no VAT to take off and none to add: the levy is 5% of what the guest pays for the accommodation.
Show the full price
UK price rules mean the price a guest sees should already include the levy.
From the councils’ own guidance, checked November 2026: City of Edinburgh Council, Glasgow City Council. An explanation, not tax advice: check your council’s guidance before you charge or file.