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We have heard that many businesses do not have the necessary infrastructure in place to collect the levy, and that if the rate were a percentage, it may make things a bit more difficult and challenging for small businesses and microbusinesses to collect. In response to the consultation, Outer Hebrides Tourism wrote about an initial period of grace from penalties for late returns and return errors. It suggested maybe about a year. Does the panel agree with that? Do you have any thoughts on how a local authority can support businesses to collect the levy to ensure that they are not penalised for non-compliance? Is the bill getting the balance right? Could I ask Sarah Maclean that question, since her organisation mentioned that?

Good morning. Leon Thompson mentioned that there are concerns about how the levy will operate, so my questions are about the process and how the money will be raised. Some witnesses referred to the levy as an accommodation tax, and others claimed that companies would be acting as unpaid tax collectors for local authorities. Should businesses be allowed to claim a percentage of the proceeds from tourist taxes to offset the costs of collecting, remitting and reporting levies, just as local authorities can recover their costs from the levy fund?

Last week, we heard that some councils want a flat rate and some want a percentage. You can imagine what businesses are thinking about such burdens, whether it is micro, small or large businesses and even websites and accountants. Should different authorities set the rate, or should the Government do that?

My question is about how the money is to be spent. Earlier on, the convener touched on that with the tourism strategy. Last week, I raised the concern that councils are going through very challenging times. There are a lot of budget cuts. Is there concern that they might end up plugging the hole with the visitor levy, especially when spending on infrastructure is such a grey area? They could end up spending the money on roads and bins. Obviously, that would work for the tourism side—people want things nice and clean and no potholes. However, that money would go into the day-to-day work of the council. What are your thoughts on that?

Good morning. My question is about how the levy will be raised. Over the past few weeks, we have heard from industry and from councils, and today we have heard from organisations representing industry. There have been a few disagreements, even today, on whether the levy should be a flat rate or a percentage rate, and on whether it should be capped through the application of a national limit. Businesses want a simpler process, but they are also looking ahead to see whether they can forecast how much money would come in.

Should local authorities have the freedom to decide whether it would be a flat rate or a percentage rate? Last week, our European witness talked about one place having both. What are your thoughts on that, and on whether it should be flat rate or a percentage rate, and whether it should be capped? I put that to Sheila Gilmore first.

Do you think that local authorities should have the freedom to decide?

I have a quick follow-up question. With local authorities going through so many cuts, how will a balance be struck so that—you have talked about roads and infrastructure—the money is used for tourism and not for the day-to-day things? Is anybody worried about that, especially given that there are so many cuts? Bill Lobban—do you want to start?

Good morning. My question is on VAT. Last week, witnesses told us that although many European markets have levies in place, they do not have our levels of VAT. A new levy in Scotland would be in addition to VAT, whereas in 25 EU countries, a discounted VAT is applied. Do you have any thoughts on that? How might it impact on the competitiveness of Scotland’s tourism industry?

I will put that question to Argyll and Bute and Edinburgh councils, because they have a lot of small businesses.

My question is on the issue that my colleague Ivan McKee has just spoken about. We have been talking about simplifying the process and helping microbusinesses and small businesses, and you have spoken about how they calculate. Would you be open to discussions about a flat rate with a nationally set cap?