WHEN is a bedroom or tourist tax not a bedroom or tourist tax? When it’s a Transient Visitor Levy, that’s when.

The long-running saga of a bedroom tax for Edinburgh has taken a new twist with the revelation that the City Council has met representatives of the Scottish Government to discuss the Transient Visitor Levy (TVL) – a charge which would be payable by visitors to the city and would be ring-fenced for cultural uses.

Two meetings have taken place following the council committing itself to pursuing some sort of TVL in April – the second was earlier this month. Council leader Andrew Burns told members: “Further work on the development of the proposition has taken place since April as well as informal consultation of members of the industry.

“There have been two material meetings between council officers and government officials. These were on September 24 and October 7, 2015.

“The dialogue and the development of the proposition continues as has been instructed by council.”

The National has learned a simple bedroom tax in which hotels add an effective tax onto bills is no longer the preferred way forward for the Edinburgh TVL.

Such a compulsory hotel-raised tax would require primary legislation through the Scottish Parliament, and having outright rejected such taxes only two years ago, the Scottish Government is not prepared to change tack.

Discussions are now thought to be centring on a voluntary levy perhaps raised through a specific form of Business Improvement District (BID) scheme in which every business involved in Edinburgh’s various festivals would be expected to participate.

The idea of a ‘festival levy’ was raised during this year’s Fringe by Underbelly producer Charlie Wood, who is also responsible for Edinburgh’s winter festival.

He said at the time: “I do think some form of tourism levy should explored. A mandatory scheme would require some form of legislation at Holyrood, but I don’t see why Edinburgh can’t do it on a voluntary basis so that hotels, restaurants and the retail sector can sign up for it at their own choice.

“I would hope the business community would understand the benefit the festivals bring to Edinburgh. I think this would be preferable to carving off a small percentage of rates.”

A key issue for those proposing the new scheme is that there might be match funding available through various additionally schemes.

By adding a small charge to ticket sales for festival and Fringe venues and encouraging local businesses such as hotels, shops and pubs to contribute to a central fund – possibly a trust – other forms of income could be gained.

The problem for those behind the TVL is that most people in Edinburgh still think of a bedroom tax, and there has been a mixed public reaction to the news that a new charging scheme is being pursued.

One businessman on the Royal Mile said: “I don’t particularly think it’s a good idea for Edinburgh as Edinburgh is a bit pricey already.”

Others would welcome the tax as it could be used for all kinds of venues. One commentator said: “A bed tax which I have also experienced in many cities should be used for the benefit of Edinburgh residents and visitors alike, in particular helping to maintain such things as good public toilet provision.”

Councillor Frank Ross, economy leader of the council, said: “We have a very clear commitment to the city’s festivals and need to think innovatively about how we maintain this support.

“Talks about the workability of additional funding methods are ongoing. It’s important we share this challenge and explore a variety of options.”

A Scottish Government spokeswoman said: “The Scottish Government regularly meets local authorities to discuss matters of shared interest, including with City of Edinburgh Council.”

A VisitScotland spokesperson said: “Our research shows value for money is one of the key factors which visitors consider when making choices about where they go when travelling.

“Both VisitScotland and those working within Scotland’s tourism sector are concerned that in the current economic climate, any increase for the Scottish industry that is directly passed to consumers could impact on visitor choice, and may see them consider holidaying in other destinations.

“This could then have a significant impact on the country’s vital visitor economy.”