64.Part 2 of the schedule makes changes to the 2024 Act that are consequential on section 2 of the 2026 Act, and other minor related changes to the 2024 Act, as follows.
65.Paragraph 8 inserts new paragraph (fa) into section 14(1) of the 2024 Act (required content of a scheme). The inserted new paragraph requires a VL scheme to specify whether liable persons are permitted to deduct and retain an amount from the levy payable in respect of a chargeable transaction and, if so, specify the maximum amount of such a deduction (referred to in the 2024 Act as “the permitted deduction”).
66.Paragraph 9 modifies section 26(2) of the 2024 Act (duty to make returns) so that, if a liable person is permitted under the VL scheme to deduct and retain an amount from the levy payable, the return to which the levy relates must also include (a) a statement of any such amount that is to be deducted from the amount of the levy payable in respect of the relevant period, and (b) a statement of the corresponding net amount of the levy payable in respect of the relevant period.
67.Paragraph 10 modifies section 29(1) of the 2024 Act (payment of levy) so that, if a return made by a liable person under section 26 of the 2024 Act includes a statement about a deduction that relates to a chargeable transaction (and this deduction not disallowed – see notes on paragraph 11 of the schedule of the 2026 Act, which inserts new section 29A into the 2024 Act), the liable person must pay (to the local authority that introduced the VL scheme – “the relevant local authority”) the amount of the levy payable in respect of the transaction less the amount of the deduction. It also modifies section 29(2) so that, if the return includes a statement in accordance with section 26(2)(a)(ii) of the 2024 Act of an amount (not exceeding the permitted deduction) that is to be deducted from the total amount of the levy payable in respect of the relevant period, the liable person must, at the same time as the return is made, pay (to the relevant local authority) the total amount of the levy payable in respect of the period less the amount of the deduction.
68.Paragraph 11 inserts new section 29A into the 2024 Act. The new section applies if (a) a liable person’s return under section 26 of the 2024 Act includes a statement about an amount that is to be deducted from the total amount of the levy payable in respect of the relevant period, (b) the relevant local authority has imposed a penalty under Chapter 3 of Part 5 of the 2024 Act on the liable person, and (c) the relevant local authority decides that the penalty relates to the relevant period (see section 26(4) of the 2024 Act). If the new section applies, the liable person’s deduction is disallowed, and the total amount of the levy must instead be paid to the relevant local authority by no later than the end of the period specified by the authority in a notice given to the liable person.
69.Paragraph 12 modifies section 52 of the 2024 Act (penalty for failure to pay levy) which provides that a penalty is payable if a liable person fails to pay the levy payable within a period of 14 days beginning with the day on which a reminder is given that the payment is due. The modification ensures that the penalty is payable if the liable person fails to pay the levy within this period, regardless of whether the levy was payable under section 29(2)(a) or (b) or section 29A(2).
70.Paragraph 13 modifies section 53 of the 2024 Act (reasonable excuse for failure to pay levy) so that liability to a penalty under section 52 of the 2024 Act also does not arise if a liable person satisfies the relevant local authority that there is a reasonable excuse for a failure to comply with new section 29A(2) of the 2024 Act.
71.Paragraph 14 modifies section 66 of the 2024 Act (interest on unpaid levy) so that, if section 29A of the 2024 Act applies to a return (i.e. a deduction from the levy payable is disallowed), the total amount of the levy payable in respect of the relevant period to which the return relates is to be treated for the purposes of section 66(1) as if it had been payable in accordance with section 29(2)(b) of the 2024 Act (i.e. from the time of making the return), with interest payable on any unpaid levy in accordance with section 66.
72.Paragraph 15 modifies section 70 of the 2024 Act (summary warrant) so that a local authority may also apply to the sheriff for a summary warrant if a person fails to pay an amount of the levy payable in accordance with section 29A(2) of the 2024 Act.
73.Paragraph 16 modifies section 76 of the 2024 Act so that references in the 2024 Act to a “permitted deduction” are to be construed in accordance with new section 12A(2) of the 2024 Act.
Schedule – Consequential and Minor Modifications of the 2024 Act Part 2 - Changes relating to permitted deductions by liable persons from levy payable