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If you're VAT registered, the order of operations matters. The levy is calculated on the net, pre-VAT accommodation charge. VAT is then charged on the accommodation and the levy together. Doing it the other way round — VAT first, levy on the gross figure — gives a levy that's too high and a return that won't reconcile.
The sequence
- Start with the accommodation charge, net of VAT, with extras such as meals, cleaning and parking removed.
- Apply the five-night cap to work out the chargeable accommodation.
- Calculate the levy at 5% of that chargeable amount.
- Add accommodation and levy together, then apply VAT to the combined figure.
Three nights at £100 net, VAT registered at 20%
- Net accommodation
- £300.00
- Levy at 5% of net
- £15.00
- VAT at 20% on £315.00
- £63.00
- Total charged to the guest
- £378.00
Applying VAT first and the levy afterwards would produce £18.00 of levy — £3.00 too much on a single short stay.
If you're not VAT registered
There's no sequencing problem: your accommodation charge is already the net figure, and 5% of it is the levy. The only thing to watch is that non-accommodation extras still come out first.
What to show the guest
The levy is an unavoidable charge, so it belongs in your headline price or clearly displayed next to it, with a breakdown at the point of booking. Showing accommodation, levy and VAT as separate lines makes the arithmetic obvious and avoids arguments at check-in.
The free calculator handles the sequence for you — tick the VAT-registered box and it shows each step. Your property settings carry the same setting across every booking in a quarter.
Official guidance
This page is a plain-English explanation of the Council's own published guidance, not a replacement for it. Always check your figures against the primary sources below.
Try it on your own numbers
Check a single booking with the free calculator, or create a free account and run a whole quarter. One property is free forever.
More guides
What happens if you calculate the Edinburgh Visitor Levy wrong
Penalties, interest and enforcement, set out factually — including what the Council's guidance leaves unconfirmed.
Edinburgh Visitor Levy quarterly filing checklist
Submission windows, payment dates, the availability declaration, and what to check before you file.
Edinburgh Visitor Levy exemptions: who qualifies and how refunds work
Exemption categories, pre-scheme bookings, and why refunds are claimed from the Council rather than from you.
Visitor Levy App helps you calculate, check and record your visitor levy. It does not file on your behalf. The property owner or operator remains legally responsible for the accuracy of the figures and for submitting the return on time. Always check the figures against your own records before you file.