6.This section inserts new sections 4A and 6A into Part 2 (key concepts) of the 2024 Act.
7.New section 4A provides that a local authority seeking to (a) introduce a new VL scheme, or (b) modify an existing VL scheme to change the basis on which the levy is to be charged, must determine whether the levy to be charged in respect of each chargeable transaction to which the scheme relates is to be on the basis of either: a percentage rate (or rates) or a fixed amount (or amounts). In the 2024 Act, a “chargeable transaction” is a purchase for value of the right to reside in or at overnight accommodation situated within the area to which a VL scheme relates for a period of one or more nights. The levy to be charged in respect of chargeable transactions under the same scheme cannot therefore involve a hybrid of the two bases (with, for example, the levy for some chargeable transactions being based on a percentage rate, and the levy for other chargeable transactions being based on a fixed amount).
8.New section 6A applies where a local authority is seeking to (a) introduce a new VL scheme under which the levy is to be charged in respect of a chargeable transaction on the basis of a fixed amount or (b) modify an existing VL scheme to provide for the levy to be charged on that basis. It requires the local authority to set the fixed amount to be charged in respect of a chargeable transaction for each night to which the transaction relates. The amount set is to be an amount that is multiplied by the number of rooms or areas in or at which any number of persons have a right to reside in pursuance of the transaction on the night. In calculating the amount of the levy to be charged, no account is to be taken of a room or area to which no part of the amount paid under the transaction relates. For example, if 20 rooms in a hotel are booked for a night by a bus tour company for a group of tourists and the hotel provides a complimentary room to the bus driver, no account is to be taken of the free room when calculating the amount of the levy to be charged.
9.The amount set under section 6A(2) may be different for different purposes or areas. Different amounts may be set, for example, by reference to different sizes, types, values or locations of overnight accommodation (including different types of overnight accommodation differentiated by the number of persons who may reside in or at the accommodation or the amount paid for the right to reside there), or by reference to different times of year when chargeable transactions are agreed or when persons otherwise take entry to such accommodation. For example, a different fixed amount may be set for a room that accommodates one person only (such as a single room in a hotel), as compared to a room or area that accommodates two or more persons (such as an entire cottage or a double or twin room in a hotel).
10.Where the amount to be set for a given night is a different amount in relation to different categories of overnight accommodation, the amount set in relation to any such category is to be an amount that is multiplied by the number of rooms or areas falling within that particular category in or at which any number of persons have a right to reside in pursuance of the transaction on the night (see section 6A(6)).
11.For example, the amount of the levy to be charged in respect of a chargeable transaction (for each night to which the transaction relates) could be £2 for a single room in a hotel multiplied by the number of such rooms in or at which, in pursuance of the transaction, at least one person has a right to reside on the night. If the same transaction also involves the purchase of the right to reside in a different category of overnight accommodation (such as a self-catering cottage) on the same night, a different fixed amount may be set for that category of accommodation too. In those circumstances, the amount of the levy to be charged in respect of a chargeable transaction for the particular night will comprise the amount of the levy to be charged for the single rooms in the hotel on the night, plus the amount of the levy to be charged for the self-catering cottage on the night.
12.Section 6A(7) and (8) provides that the Scottish Ministers may by regulations specify the maximum amount that may be set, and the regulations may specify different maximum amounts for different purposes. Before making any such regulations, the Scottish Ministers must first consult local authorities, such persons as they consider to be representative of communities, businesses engaged in tourism and tourist organisations, and such other persons as they consider appropriate. A draft of the regulations must also be laid before and approved by the Scottish Parliament before any regulations can be made (see also section 29 of the Interpretation and Legislative Reform (Scotland) Act 2010 for the meaning of “the affirmative procedure”).
The Act Basis on which levy is to be charged Section 1 - Basis on which levy is to be charged