Schedule 2 – Amendments Relating to Parts 2 and 3 Part 2 Amendments Relating to Part 3 of This Act Paragraphs 37 to 48 - Amendments to Part 5 of the 2016 Act
242.Paragraph 37 inserts a new section 117A in the TCMA 2016 that provides definitions of “devolved tax return”, “visitor accommodation provider” and “visitor levy return” for Part 5 of the TCMA 2016. The amendment also signposts section 120G of the TCMA 2016 (inserted by paragraph 42 of this Schedule) regarding persons that have ceased to be a VAP. It also provides a default rule that where a VAP has not indicated whether they will make annual or quarterly returns to WRA they are treated as making annual returns.
243.Paragraphs 38 to 41 make a number of amendments to provide that sections 118 to 120 of the TCMA 2016, which set out the penalty rules for failures to make a return, are to apply only to devolved taxes and not to the visitor levy.
244.Paragraph 42 inserts new sections 120A to 120H in the TCMA 2016.
245.Sections 120A to 120D provide the rules of the penalty point-based regime for the late filing of visitor levy returns for annual and quarterly visitor levy returns.
246.For annual returns if a return is not made on or before the filing date the VAP is liable to a penalty point. A penalty point awarded to a VAP in relation to a failure to make an annual visitor levy return expires at the end of the period of 24 months beginning with the filing date of the return to which the penalty relates.
247.If a VAP filing annual returns has reached two penalty points, the VAP is liable to a penalty of £100. Due to the rules on the expiry of penalty points, there is no financial penalty for incurring one point over a 24-month period.
248.For quarterly returns if a return is not made on or before the filing date the VAP is liable to a penalty point. A penalty point awarded to a VAP in relation to a failure to make a quarterly visitor levy return expires at the end of the period of 12 months beginning with the filing date of the return to which the penalty point relates.
249.If a VAP filing quarterly returns has reached four penalty points, the VAP is liable to a penalty of £100. Due to the rules on the expiry of penalty points, there is no financial penalty for incurring up to three points over a 12-month period
250.A VAP that has incurred one or more unexpired penalty points may not change the frequency of their return obligations from quarterly to annual or from annual to quarterly.
251.As well as the provision for the points-based penalty system section 120E provides that for both quarterly and annual return obligations that a VAP is liable to a penalty of £100 if a return has still not been filed 6 months after the filing date.
252.Section 120F provides that, as well as the points-based penalty system, for both quarterly and annual return obligations, a VAP is liable to a penalty if a return has not been filed 12 months after the filing date. Where, by failing to make the return, the VAP deliberately withholds information that would enable WRA to assess the VAP’s liability to the visitor levy, the penalty is £300, or a greater amount not exceeding 95% of the visitor levy to which the VAP would have been liable if the return had been made. Where the return is late, but the VAP has not deliberately withheld information, the penalty is the greater of £300 and 5% of the visitor levy to which the VAP would have been liable if the return had been made.
253.Section 120G provides that references to a VAP in sections 117A(2), 120A, 120E and 120F include a person that is required by virtue of section 41 to make a visitor levy return. This preserves the effect of these sections where a person has ceased to be a VAP, ensuring penalties still apply where a person has a duty they have yet to comply with.
254.Section 120G provides that references to a VAP in sections 120B to 120D include a person that has ceased to be a VAP.
255.Section 120H establishes how sections 120A to 120D (penalty points and related financial penalties) and 120G (which deals with where a person has ceased to be a VAP) apply where a VAP is a partnership or unincorporated body.
256.For the purposes of those sections, the members of a partnership or other unincorporated body are to be treated as a single person. A failure by one of the members is to be treated as a failure by the deemed single person. Similarly, anything done by or in relation to a member of a partnership or body is to be treated as done by or in relation to that deemed single person.
257.Subsection 120H(2) provides that where there is a change in the membership of the partnership or body, the single deemed person is to be treated as continuing in existence.
258.Subsection (3) sets out that every relevant member of a partnership or unincorporated body is jointly and severally liable for penalties assessed on the deemed single person.
259.Subsection (4) provides the meaning of “relevant member”.
260.Paragraph 43 amends section 121(1) of the TCMA 2016 to allow WRA to reduce financial penalties for failure to make tax return in respect of the new penalty regime for the visitor levy.
261.Paragraph 44 makes amendments to section 122 of the TCMA 2016 to introduce rules for financial penalties when a VAP fails to pay the visitor levy to WRA by the due date. The penalty for failure to pay the visitor levy on time is 5% of the amount of unpaid visitor levy, but if 5% of the amount of unpaid visitor levy is lower than £100, the penalty is to be £100; and if 5% of the amount of unpaid visitor levy is greater than £5000, the penalty is to be £5000.  Other amendments are made to section 122 that are consequential on the new section 122B and to insert a new line into Table A1 to specify the penalty date in respect of an amount of visitor levy.
262.Paragraph 45 inserts a new section 122B of the TCMA 2016. The new section provides penalties where there is a continuing failure to pay the visitor levy. A VAP becomes liable to further late payment penalties if an amount of visitor levy remains unpaid after 6 months. The penalty is to be 5% of the amount that remains unpaid, but, if 5% of the unpaid amount is lower than £100, the penalty is to be £100, and, if 5% of the unpaid amount is greater than £5000, the penalty is to be £5000. If the visitor levy remains unpaid 12 months after the date a liability to pay the penalty arose under section 122 of the TCMA 2016, then a penalty based on the same calculation method as at 6 months is applied to the amount of visitor levy outstanding at the 12-month penalty date.
263.Paragraphs 46 to 48 amend sections 126, 127 and 128 of the TCMA 2016 to include cross references to the visitor levy penalties so that the rules contained in those sections apply to the penalties related to the visitor levy.