Part 5 – Enforcement of the levy and penalties
Chapter 1 – Investigatory Powers
Section 30 – Power to obtain information and documents from the liable person
62.This section gives an “
63.An example of a circumstance in which this power might be used is where a local authority has cause to believe that an occupier of premises may have been providing overnight accommodation without making returns or payment in accordance with the duties in sections 26 and 29.
64.Subsection (4) contains a number of definitions used in this Part of the Act.
Section 31 – Power to obtain information and documents from third parties
65.This section gives an authorised officer power to issue an information notice to a person (other than a liable person) requiring the provision of information or production of a document in respect of a liable person as specified in the notice (subsections (1) and (3)). An information notice may be issued under this section where (i) the officer reasonably requires the information or document for the purpose of assessing the liable person’s liability to pay the levy and any penalties paid or payable by the liable person in connection with the levy, and (ii) it is reasonable for the person to be required to provide the information or produce the document (subsection (2)).
66.An example of a circumstance in which this power might be used is where a local authority has cause to believe that a travel booking company may have been providing overnight accommodation on behalf of a liable person, without returns or payment having been made in accordance with the duties in sections 26 and 29.
Section 32 – Complying with information notices
67.This section makes general provision regarding information notices issued under sections 30 and 31. It provides that a person issued with an information notice must provide the requested information or document by the time, and in the manner, reasonably specified in the notice (subsection (1)). Where production of a document is requested, it must be produced at an agreed place or at such a place reasonably specified by the authorised officer (which may not be a place used solely as a dwelling) (subsections (2) and (3)).
Section 33 – Producing copies of documents
68.This section makes general provision regarding information notices issued under sections 30 and 31. It provides that any requirement in an information notice to produce a document may be complied with by producing a copy of the document (subsection (1)). However, it will not be possible to comply with such a requirement by producing a copy of the document where the notice specifically requires, or an authorised officer subsequently requests, the original document (subsection (2)). Where an authorised officer subsequently requests the production of an original document, subsection (3) requires it to be produced by the time, and in the manner, reasonably requested by the officer.
Section 34 – Further provision about powers relating to information notices
69.This section provides the Scottish Ministers with a power to make regulations regarding the form and content of information notices and the manner and time period for complying with such notices. Regulations made under this section are subject to the negative procedure.
Section 35 – Information notices: general restrictions
70.This section provides for some general restrictions on information notices, including that a person is required to produce a document only if it is in their possession or power (subsection (1)). In addition, an information notice may not require a person to produce a document if the whole of it originates more than 5 years before the date of the notice (subsection (2)).
Section 36 – Types of information
71.This section sets out the types of information that an information notice cannot compel a person to provide or produce. These are: (i) material acquired or created for the purposes of journalism (subsections (1) to (4)), and (ii) information contained in certain types of “
Section 37 – Protection for privileged communications between legal advisers and clients
72.This section provides that an information notice issued under section 30 or 31 does not require a person to provide privileged information or parts of documents that are privileged (subsection (1)). This refers to information or documents that benefit from the confidentiality that arises in information or documents between a professional legal adviser and a client (subsection (2)).
Section 38 – Power to inspect business premises
73.This section provides that an authorised officer can enter a liable person’s business premises and inspect the premises (including buildings, structures, land and transport) and business documents on the premises if the officer has reason to believe that the inspection is reasonably required to assess the liable person’s liability to pay the levy (subsections (1) and (2)). Subsection (3) confirms that the authorised officer is not able to enter or inspect any part of those premises that is used solely as a dwelling. A person who deliberately obstructs an authorised officer (or a person authorised by the officer) in the course of an inspection under this section is liable to a penalty under section 56. The terms “business documents”, “business premises”, “
Section 39 – Power to inspect business premises of third parties
74.This section provides that an authorised officer can enter and inspect the business premises (and any “relevant documents” found) of a person who has entered into an arrangement with the liable person under section 9 (which could be an online booking agent, for example), or other persons specified by the Scottish Ministers in regulations (such persons are referred to in this section as an “
75.The power under this section can be exercised where the authorised officer has reason to believe that the inspection is reasonably required to assess the liable person’s liability to pay the levy (subsection (2)). Subsection (4) confirms that the authorised officer is not able to enter or inspect any part of those premises that is used solely as a dwelling. A person who deliberately obstructs an authorised officer (or a person authorised by the officer) in the course of an inspection under this section is liable to a penalty under section 56.
Section 40 – Carrying out inspections under sections 38 and 39
76.This section sets out conditions for inspections of business premises as provided for under sections 38 and 39. Subsection (1) gives the person whose business premises are to be inspected an opportunity to agree a time for the inspection to be carried out, but this may be overridden where the conditions in subsection (2) are satisfied (in which case, the inspection is to be carried out at any reasonable time). Those conditions are that either: (a) the occupier of the premises is given at least 7 days’ notice in writing of the time of the inspection; or (b) the authorised officer has reasonable grounds for believing that giving notice of the inspection would seriously prejudice the assessment of the liable person’s liability to pay the levy, or the payment of the levy by the liable person (for example, if the officer had concerns that the person was likely to try and destroy or remove important evidence in advance of an inspection).
77.Subsection (3) provides that where an inspection is carried out by virtue of section (2)(b) (i.e., where no notice of the inspection is given), a written notice must be provided to the occupier or someone else who appears to be in charge of the premises at the time. If no one is present at the time, the notice must be left in a prominent place on the premises. Subsection (4) provides that a notice given in advance of an inspection (under subsection (2)(a)) or at the time of an inspection (under subsection (3)) must state the possible consequences of obstructing the authorised officer from exercising the power to carry out the inspection.
Section 41 – Carrying out inspections under section 38 or 39: further provision
78.This section provides further powers, in subsections (2) to (5), available to an authorised officer carrying out an inspection of business premises under section 38 or 39. These include: taking any person(s) with them onto the premises (including a constable where the officer has reasonable cause to anticipate serious obstruction); taking any equipment or materials required for the purpose of the inspection (for example heavy machinery); examining or investigating anything considered necessary in the circumstances of the inspection; directing that the premises (or any part of the premises) be left undisturbed for as long as is reasonably necessary for the purposes of any examination or investigation.
79.The power to take equipment or machinery can be exercised at a time agreed with the occupier or, alternatively, at any reasonable time (subsection (6)). The power can only be exercised without the agreement of the occupier at a reasonable time either: (a) where a notice was issued under section 40(2)(a) informing the occupier in advance that the officer intended to exercise the power; or (b) where the officer considers that there are reasonable grounds for believing that giving advance notice that the power will be exercised would seriously prejudice the assessment of the liable person’s liability to pay the levy, or the payment of the levy by the liable person. Subsection (8) applies the requirements in section 40(3) and (4) to the exercise of the power in subsection (3) where advance notice is not given by virtue of subsection (7)(b); as a result, in such a case, written notice must be provided to the occupier or someone else who appears to be in charge of the premises at the time of the inspection (or if no one is present at the time, the notice must be left in a prominent place on the premises) stating the possible consequences of obstructing the authorised officer from exercising the power to carry out the inspection.
Section 42 – Power to copy and remove documents
80.This section provides a power for an authorised officer to copy, make extracts from and remove documents at a reasonable time (subsections (1) and (2)(a)). What amounts to a reasonable time in subsection (2)(a) will depend on the context and so will vary from case to case. Documents removed may also be retained for a reasonable period of time if the authorised officer considers it necessary to do so (subsection (2)(b)). Subsection (3) allows the person who produced the document to request a receipt for it and a copy of it. The authorised officer must not charge for providing either the receipt or the copy (subsection (4)).
81.Subsection (5) provides that where a document that has been removed is lost or damaged, the relevant local authority is liable to compensate the owner of the document for any expenses reasonably incurred in replacing or repairing the document.
Section 43 – Restriction on inspection of documents
82.This section provides that an authorised officer may not inspect a document during an inspection if an information notice given at the time of the inspection could not require the occupier of the premises to produce the document (for example, if the document is legally privileged).
Section 44 – Electronic records
83.This section deals with the application of the enforcement powers in relation to information and documents which are held electronically. It applies to any provision of this Chapter or Chapter 3 (penalties) of Part 5 which (i) relates to the requirement to provide information or produce documents, or permits the inspection, copying or removal of documents, or (ii) makes provision about penalties in connection with those matters (subsection (1)). Subsection (2) provides that in any such provisions, references to information are to be read as information held in any form, and references to documents are to be read as anything in which information of any description may be recorded; similarly, references to copies of documents are to be read as anything onto which information recorded in the document has been copied by whatever means.
84.Subsection (3) allows an authorised officer at a reasonable time to obtain access to, inspect, and check the operation of any electronic device or other equipment used in connection with “relevant information” or a “
Chapter 2 – Assessments where no return or incorrect return
Section 45 – Power to allow a local authority to make or substitute an assessment
85.This section allows the Scottish Ministers to make provision, by regulations subject to the affirmative procedure, for and in connection with a relevant local authority assessing the levy payable by a person (subsection (1)). The relevant local authority may only exercise this power if it has reason to believe that the person liable to pay the levy has not made a return by the date required under section 26(2)(b), or where the local authority is honestly and reasonably of the view that the return is incorrect either because of carelessness or deliberate miscalculation.
86.Subsection (2) lists the matters that regulations may make provision for or in connection with. Regulations may make provision for the conditions that a local authority must be satisfied of before making an assessment of a levy when no return has been made, or where the local authority is of the view that an assessment of a levy in a return is incorrect. In addition, regulations may make provision for the procedure a local authority must follow to make an assessment of the levy payable, the notices that must be given before or after an assessment, time limits for and delegation of the exercise of powers, and the effect of an authority’s assessment on the imposition of penalties under Part 5, Chapter 3.
87.Subsection (3) sets out the matters that regulations must make provision for: reviews of an assessment made by a local authority (and may include the matters mentioned in section 71(2)) and appeals to the First-tier Tribunal for Scotland against an assessment after a review has been conducted (and may include the matters mentioned in section 72(2)).
Chapter 3 – Penalties
Section 46 – Power of local authorities to impose penalties
88.This section contains a power allowing a local authority which has introduced a VL scheme to impose penalties on certain persons in accordance with the provisions in this Chapter. This is a discretionary power which allows local authorities to decide whether or not to impose a penalty where liability arises under a particular section in this Chapter.
Sections 47 to 50 – Penalties for failure to make returns
89.Section 47 provides that a liable person who fails to make a return as required by section 23 is liable to a penalty as determined by a relevant local authority. Sections 48 to 50 contain additional penalties as determined by a relevant local authority and which a local authority may impose regarding a failure to make a return in cases where the failure continues for 3 months (section 48), 6 months (section 49), or 12 months (section 50). Liability arises under sections 47 to 50 according to the timeframes mentioned in those sections and so if a liable person has not made a return after 12 months, liability to a penalty, as determined by a relevant local authority, arises under each of sections 47, 48, 49 and 50, and the local authority may choose to impose all, some or none of the penalties set out in those sections.
Section 51 – Reasonable excuse for failure to make returns
90.This section provides that no liability to a penalty arises under sections 47 to 50 where a person who has failed to comply with the duty in section 26 has a reasonable excuse for the failure (subsection (1)). An insufficiency of funds is not a reasonable excuse (subsection (2)(a)), nor is that the person relied on another person to do things (unless the person who failed to comply took reasonable care to avoid the failure – subsection (2)(b)). Examples of things which may qualify as a reasonable excuse include serious unexpected illness, an unforeseen collapse of a third party’s IT system (meaning that a return could not be sent), or the liable person's office being destroyed by fire. Where the reasonable excuse ceases to apply, the person who failed to comply with section 26 is still able to rely on the excuse, provided the failure is remedied without unreasonable delay (subsection (2)(c)).
Section 52 – Penalty for failure to pay levy
91.Section 52 provides that a liable person who fails to pay the total amount of the levy as required by section 29 is liable to pay a penalty as determined by a relevant local authority (subsections (1)(a) and (2)). Additional penalties (as determined by a relevant local authority) are payable where any amount of the total amount of the levy remains unpaid after 5 months (subsection (3)) and 11 months (subsection (4)). Liability to pay a penalty under this section only arises where the local authority has issued a reminder that payment is due and 14 days pass without payment being made (subsection (1)(b) and (c)).
Section 53 – Reasonable excuse for failure to pay levy
92.This section provides that no liability to a penalty arises under section 52 where a person who has failed to comply with the duty in section 29 has a reasonable excuse for the failure (subsection (1)). An insufficiency of funds is not a reasonable excuse (subsection (2)(a)), nor is that the person relied on another person to do things (unless the person who failed to comply took reasonable care to avoid the failure – subsection (2)(b)). Examples of things which may qualify as a reasonable excuse include serious unexpected illness, an unforeseen collapse of a third party’s IT system (meaning that levy could not be paid), or the liable person's office being destroyed by fire. Where the reasonable excuse ceases to apply, the person who failed to comply with section 29 is still able to rely on the excuse, provided the failure is remedied without unreasonable delay (subsection (2)(c)).
Section 54 – Penalty for failure to keep and preserve records
93.This section provides that a person who fails to comply with the duty in section 28 to keep and preserve records is liable to a penalty as determined by a relevant local authority (subsection (1)). The duty to keep and preserve records under section 28 falls on the liable person and any person who has entered into an arrangement under section 9 to make returns on behalf of the liable person. But no penalty is incurred under this section if the person provides other documentary evidence of relevant facts to the satisfaction of the local authority (subsection (2)).
Section 55 – Reasonable excuse for failure to keep and preserve records
94.This section provides that no liability to a penalty arises under section 54 where a person who has failed to comply with the duty in section 28 has a reasonable excuse for the failure (subsection (1)). An insufficiency of funds is not a reasonable excuse (subsection (2)(a)), nor is that the person relied on another person to do things (unless the person who failed to comply took reasonable care to avoid the failure – subsection (2)(b)). An example of a reasonable excuse here may be where the liable person's office is destroyed by fire. Where the reasonable excuse ceases to apply, the person who failed to comply with section 28 is still able to rely on the excuse, provided the failure is remedied without unreasonable delay (subsection (2)(c)).
Section 56 – Penalties for failure to comply or obstruction
95.A person who fails to comply with an information notice issued under section 30 or 31 or who obstructs an authorised officer in the course of an inspection is liable to a penalty as determined by a relevant local authority (subsections (1) and (2)). The penalty under this section also applies to a person who conceals, destroys or disposes of a document in breach of sections 60 or 61 (subsection (3)).
Section 57 – Daily default penalties for failure to comply or obstruction
96.Where a person receives a penalty under section 56, but the failure to comply or the obstruction mentioned in that section continues, the person is liable under this section to further penalties as determined by a relevant local authority for each day that the failure to comply or obstruction continues.
Section 58 – Reasonable excuse for failure to comply or obstruction
97.This section provides that no liability to a penalty arises under sections 56 or 57 where a person has a reasonable excuse for the failure to comply or the obstruction (subsection (1)). An insufficiency of funds is not a reasonable excuse (subsection (2)(a)), nor is that the person relied on another person to do things (unless the person who failed to comply or was responsible for the obstruction took reasonable care to avoid the failure or obstruction – subsection (2)(b)). While it will depend on the precise circumstances, examples of things which may qualify as a reasonable excuse include serious unexpected illness, an unforeseen collapse of a person’s IT system (meaning that information or documents could not be provided), or the person’s office being unsafe for the officer to enter (because of damage caused by fire or flooding for example). Where the reasonable excuse ceases to apply, the person who failed to comply or was responsible for the obstruction is still able to rely on the excuse, provided the failure is remedied, or the obstruction stops, without unreasonable delay (subsection (2)(c)).
Section 59 – Penalties for inaccurate information or documents
98.A person who, in response to an information notice issued under section 30 or 31, provides inaccurate information, or produces a document containing an inaccuracy is liable under this section to a penalty as determined by a relevant local authority in respect of each inaccuracy (subsections (1)(a), (6) and (7)). Liability for a penalty only arises where the inaccuracy is careless or deliberate, or the person knew of the inaccuracy at the time and did not inform the local authority, or discovers the inaccuracy later and fails to take reasonable steps to inform the local authority (subsections (1)(b) and (2) to (5)).
Section 60 – Concealing, destroying etc. documents following information notice
99.This section provides that a person in receipt of an information notice issued under section 30 or 31 must not conceal, destroy or dispose of a document to which the notice relates (subsection (1)). But a person may do so after the document has been produced to an authorised officer (but not if they have been told to continue to make the document available for inspection) (subsection (2)). In a case where section 33 applies (i.e. a person complies with an information notice by providing a copy of the document), the effect of subsection (3) is that a person is free to destroy or dispose of the original document to which the information notice relates, provided they do so at least 6 months after the copy of the document was produced (unless, before then, an authorised officer requests the original document under section 33(2)(b)). The penalty applying to an act of concealing, destroying or disposing of a document in contravention of this section is as determined by a relevant local authority (see section 56(2) and (3)).
Section 61 – Concealing, destroying etc. documents following information notification
100.This section provides that a person must not conceal, destroy or dispose of any document which an authorised officer has notified is to be, or is likely to be, the subject of an information notice (subsection (1)). However, if at least 6 months have passed since that notification was given, the person may conceal, destroy or dispose of the document (subsection (2)(a)). The prohibition in subsection (1) does not apply where an information notice has been given to the person requiring the document to be produced (subsection (2)(b); but in such a case, section 60 will apply to prohibit the person from concealing, destroying or disposing of the document). The penalty applying to an act of concealing, destroying or disposing of a document in contravention of this section is as determined by a relevant local authority (see section 56(2) and (3)).
Section 62 – Assessment of penalties
101.This section deals with the assessment of penalties under this Chapter. Where a person becomes liable for a penalty and the local authority choose to impose it, subsection (1) requires the local authority to assess the penalty (to ascertain the amount of penalty due) and notify the person that the penalty is due. That assessment must be made within 12 months of the person becoming liable to the penalty (subsection (3)), or, as regards a penalty under section 59 (penalties for inaccurate information or documents), within 12 months of the inaccuracy first coming to the attention of an authorised officer and within 6 years of the person becoming liable to the penalty (subsection (5)). But if the penalty is one relating to an information notice which may be appealed, the assessment under section 56 or 57 (penalties for failure to comply or obstruction) is to be carried out within 12 months of the end of any period in which notice of an appeal may be given, or if an appeal is made, within 12 months of the date on which the appeal is determined or withdrawn (subsection (4)). The obligation to pay the penalty does not arise until notification of the penalty is issued under subsection (2)(b).
Section 63 – Enforcement of penalties
102.This section provides that a penalty under this Chapter is to be paid within 30 days of the notification of the penalty.
Section 64 – Failure to comply with time limit
103.This section provides that a person who fails to comply with a time-limited requirement does not become liable for a penalty under section 56 or 57 (penalties for failure to comply or obstruction) if they comply with the requirement within a further period allowed by the authorised officer.
Section 65 – Power of local authorities to reduce, suspend or waive penalties
104.Under this section, a local authority may waive or suspend a penalty, or agree a compromise in relation to proceedings for the penalty, where special circumstances apply (subsections (1) and (3)). But the ability of the person to pay the penalty is not to be regarded as a special circumstance (subsection (2)). Subsection (4) confirms that the power of a local authority under this section applies not only to the penalty, but to any interest in relation to the penalty.
Section 66 – Interest on unpaid levy
105.This section provides that interest is payable on the amount of any unpaid levy from the day after the date on which the levy must be paid under section 29 (subsection (1)). Where an amount of unpaid levy is paid to the local authority, interest is payable only on the remainder of unpaid levy (subsection (2)). The rate of interest applicable is that specified in regulations made under section 68 (subsection (3)).
Section 67 – Interest on penalties
106.This section provides that interest is payable on the amount of any unpaid penalty from the date on which the penalty must be paid until it is paid (subsection (1)). The rate of interest applicable is that specified in regulations made under section 68 (subsection (2)).
Section 68 – Rate of interest
107.The rates of interest which are to apply to unpaid levy or unpaid penalties are to be specified in regulations made by the Scottish Ministers under this section (subsection (1)). Different rates can be specified for different penalties, and provision can be made for the alteration of rates of interest (subsection (2)). Regulations made under this section are subject to the negative procedure (subsection (3)).
Section 69 – Power to change penalty provisions
108.This section gives the Scottish Ministers power to make further provision by regulations about penalties, including making amendments to this Act or other legislation (subsections (1) and (4)). Provision which can be made includes provision about the circumstances in which a penalty is payable, the amounts of the penalties, issuing procedures and enforcement of penalties (subsection (2)), but the power cannot be used to create criminal offences (subsection (3)). Regulations made under this section are subject to the affirmative procedure (subsection (6)).
Chapter 4 – Recovery of unpaid amounts
Section 70 – Summary warrant
109.This section provides that the local authority may apply to the sheriff for a summary warrant where a person does not pay the levy, or a penalty imposed under Chapter 3 (subsections (1) and (2)). The application to the sheriff must include a certificate which states that the person has failed to pay the sum by the due date, a demand for payment has subsequently been issued and the sum due remains unpaid for at least 14 days (subsections (3) and (4)). The sheriff must then issue the summary warrant which authorises the recovery of the sum payable by the means set out in subsection (6). In addition to the sum of levy or penalty due, the person is liable to pay the sheriff officers’ fees and expenses reasonably incurred (subsection (7)), other than fees for collecting and accounting to the local authority sums paid to the sheriff officer by that person (subsection (8)).
Chapter 5 – Reviews and appeals
Section 71 – Reviews
110.This section requires the Scottish Ministers to make regulations, subject to the affirmative procedure, providing for the review by a local authority of its decisions in connection with the operation of a VL scheme, enforcement action taken by it, and penalties imposed by it (subsections (1) and (3)). The type of provision which can be made under this section includes the procedure for carrying out reviews and the steps that can be taken by a local authority following the outcome of reviews (subsection (2)).
Section 72 - Appeals
111.This section requires the Scottish Ministers to make regulations, subject to the affirmative procedure, providing for appeals to the First-tier Tribunal for Scotland against decisions by a local authority in connection with the operation of a VL scheme, enforcement action taken by the authority, and penalties imposed by the authority (subsections (1) and (4)). The type of provision which can be made under this section includes the time limits for bringing an appeal and the steps that can be taken by a local authority following the outcome of an appeal (subsection (2)). As a result of subsection (3), regulations made under this section must require a review to have been carried out (under regulations made under section 71) before an appeal can be brought in relation to the decision, enforcement action or penalty.
