The Act: an Overview
3.The Act allows local authorities to introduce schemes requiring the payment of a levy on the purchase of overnight stays in certain types of accommodation (referred to in the Act and these notes as “a VL scheme”). The amount of the levy will be a percentage of the cost of the accommodation, with the rate being set by the local authority introducing the VL scheme (subject to any maximum percentage rate set by the Scottish Ministers). The person liable to pay the levy to the local authority is the person who provides the accommodation and who is the occupier of the premises at which the accommodation is provided (referred to in the Act and these notes as “the liable person”), although in practice, the liable person (or a third party acting on their behalf) will be able to collect the amount of the levy from the person who pays to stay overnight in, or at, the accommodation (that person is referred to in the Act and these notes as a “visitor”).
4.Part 1 of the Act contains the power for local authorities to impose a levy in accordance with the Act. It also contains an overview of the Act.
5.Part 2 of the Act contains the key concepts underpinning the levy: it sets out the types of accommodation in respect of which a levy may be imposed, how the levy is to be calculated (including provision for a cap on the number of chargeable nights) and confirms that it is the liable person who must pay the levy. It also allows the liable person to delegate the performance of certain functions to a third party. This Part also allows the Scottish Ministers to provide in regulations for the maximum percentage rate, billing of overnight accommodation and exemptions from the levy.
6.Part 3 of the Act deals with the process to be followed by a local authority when introducing a VL scheme, including requirements as to consultation, scheme content, exemptions, accounting and reporting. This Part also requires local authorities to use the net proceeds from a scheme for specific purposes and gives the Scottish Ministers powers to make further provision about the process to be followed by local authorities in connection with a VL scheme. It also deals with the issuing and reviewing of guidance on the VL scheme.
7.Part 4 of the Act deals with returns and payments. It requires the liable person to make returns to the local authority (which must include that person’s assessment of the amount of the levy payable) and make payment of the levy due. The requirement to provide returns showing an assessment of the levy or tax due alongside payment of the levy or tax due is a common feature in the assessment and collection of certain taxes (see, for example, section 23 of the Air Departure Tax (Scotland) Act 2014). Returns and payments are to be made quarterly, or in respect of periods specified by the local authority. This Part also allows a local authority to delegate certain functions relating to the collection and enforcement of the levy.
8.Part 5 of the Act deals with enforcement of the levy and includes penalties for non-compliance with the Act's requirements. The provisions in this Part contain powers and penalties similar to those found in Parts 7 and 8 of the Revenue Scotland and Tax Powers Act 2014. Investigatory powers are given to an authorised officer (i.e., a person authorised by the local authority) under Chapter 1 to require the provision of information or production of documents and permitting the inspection of business premises. This Chapter also contains rules on the manner in which these investigatory powers may be carried out. Chapter 2 of Part 5 contains a power for the Scottish Ministers to set out in regulations the circumstances in which local authorities may make or substitute an assessment.
9.Chapter 3 of Part 5 gives local authorities power to impose certain penalties on persons in connection with the levy. Penalties which may be imposed under this Chapter include a penalty for failure to make a return and penalties for failure to pay the levy. Chapter 4 of this Part provides for the recovery of unpaid amounts of levy and penalties by means of an application to a sheriff for a summary warrant. Chapter 5 of Part 5 gives Scottish Ministers powers to make regulations allowing for reviews by local authorities and appeals to the First-tier Tribunal for Scotland as regards decisions taken by a local authority in connection with the operation of a scheme, enforcement action and the imposition of penalties.
10.Part 6 of the Act provides local authorities with a power to set up a register of liable persons and allows local authorities to share information with certain persons (for example, authorised officers who carry out enforcement powers in connection with the levy).
11.Part 7 of the Act contains general provisions about regulation making powers contained in the Act, ancillary provision, commencement and the short title of the Act.