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I was merely pointing out that, when it came to preparing my corporation tax and VAT, I was unable to claw back money for that. I really appreciate the point that we need to be mindful about the time and cost that will be required by businesses to prepare for the levy, but we need to ensure that we do so in a consistent manner.

As I was saying, although I recognise that my amendments, as drafted, might not be practical, the principle is about ensuring that we recognise the smallest microbusinesses, give consideration to them and, where appropriate, seek to exempt them.

Of course.

I note the minister’s comments about previous amendments. In relation to amendment 42, however, will the Government consider explicitly requiring local authorities, as they develop and deploy their plans for local levies, to consider small businesses and VAT thresholds? Such consideration could be required as part of the impact assessments under the bill.

That may well be an error on my part. Amendment 28 is a probing amendment. The key point is to ensure that we treat people who are here to do work in a different manner to the way in which we treat people who are here to partake in tourism.

I want to highlight two brief points. First, I recognise the issue of motorhomes, but a basic principle is that it is not always possible to tell who is staying where, regardless of the type of accommodation. We have to assume that people will be honest. I do not consider a motorhome per se to be different from any other type of accommodation.

Secondly, in not making liable for the levy vessels that are moored that provide accommodation, or vehicles that are parked up that provide accommodation, there is a risk that certain types of accommodation will not have the levy applied to them, whereas others will.

Does the minister acknowledge that that potential loophole needs to be thought about at stage 2 and, ultimately, stage 3, to ensure that there are no significant areas in which people can provide accommodation without being liable for the levy?

I will speak in support of the points that Neil Bibby has just made.

There are two fundamental points in this area. The first is that our tourism offer comprises a broad range of business types. Not the least of those are our cultural organisations, which form a critical part of that offer and so must be taken into consideration in assessing how the levy is rolled out and how the funding is used.

I turn to the second and perhaps more fundamental point. We will discuss definitions in the context of later amendments, but I point out here that having an effective consultation process will be vital if we are to give businesses in the sector confidence that the levy will improve the tourism offer rather than simply being another tax that they will have to pay.

Let us take this point head on: frankly, there are fears that this will be just another consultation exercise, that there will be another form to fill in and that it is something that local authorities will perform only in order to levy the tax. Businesses want to be involved in deciding how the money is to be spent.

I would therefore be grateful if, in his concluding remarks, the minister could give his thoughts on how the guidance can be devised and the requirements put in place so there is not only a form on a website, but engagement and co-decision-making with the businesses that are impacted. There must also be consultation about how the money will be spent so that it genuinely adds to the tourism offer in our towns, cities and rural locations, rather than simply being another fiscal burden on businesses that are already struggling—as Pam Gosal pointed out.

I should explain the primary purpose of amendment 28, in my name, because it might not be entirely clear.

Amendment 28 caps the number of nights to which the visitor levy would apply. As a member who represents an Edinburgh constituency, the key point for me is that, during the festivals in the summer, a large number of people use accommodation such as hotels but come here to work, provide their services and be part of the festivals. It strikes me that when people use accommodation beyond a certain number of nights, it ceases to be temporary and they cease to be visitors because they are here to work.

A threshold for the number of nights would be a simple way of providing an exemption for people who visit a place semi-permanently to work. It avoids the complexity of trying to come up with definitions and it is just a simple number. Amendment 28 is a probing amendment to explore how we would treat people who are here either for particular purposes or to service the tourism and visitor economy.

I will address the points that Miles Briggs raised. It is fair to say that, among local authorities and the business community, there are mixed views regarding whether a percentage rate or flat fee should apply. I have spoken to business organisations that have said that they have members who argue both sides. However, the arguments that Miles Briggs made have some merit.

There would be a considerable degree of additional simplicity to having a flat fee. When you apply a flat fee, it is simply a matter of multiplying it by the number of rooms that have been occupied over a given period. The complexity of having a percentage is not to be underestimated, not just for the reasons that Mr Briggs set out around additional charges, but also because the vast majority of accommodation providers will have variable rates, which means that some quite complicated record keeping and administration would be required. That needs to be thought through.

The other point is that there should be a degree of consistency, so that the system is understandable. The last thing that we want is 32 varieties of visitor levy, which would make the situation complicated and confusing for visitors who go to a number of places during their time in Scotland. It is important that there is local discretion around the levy—it should be a levy that is locally devised and implemented—but we should also look at ways to ensure that there is a degree of consistency in order to improve the ease of understanding of the system.

On the flipside of that—because there are opposing views on the matter—I note that the moment that you have a flat fee, you get into the complexity of how that is increased and administered, and all the issues that arise when there are fixed rates in law, such as fiscal drag and so on, which we are all aware of. Having spoken to colleagues in local authorities, I know that they are concerned that, if there were to be a flat rate, they would get into a continual debate—annually, or whenever the issue is reviewed—about what the fee should be. That is the argument for using a percentage rate.

Using percentages is inherently more complicated than other approaches—VAT is a non-trivial tax to collect, administer and police in order to verify that people are paying the correct amount. We should be careful about the complexity that using a percentage fee causes in the system that we are creating.

Finally, we need to think about how we treat people who are here to—

Looking at “Total other operating expenditure” in appendix 1, I see a figure of £5.3 million compared with £3.9 million in 2021-22. That is a 37 per cent increase in non-people costs. Is that correct?

In that context, it is incumbent on us to understand the robustness of the figures that you have come back with, and, in particular, how you have sought to find efficiency savings to contain your budget request within the challenging fiscal envelope in which we find ourselves. You set out your efficiency savings in appendix 3. Can you confirm that all those efficiency savings have been applied to the breakdown of your budget in appendix 1?

Thank you.