Part 3 – Visitor Levy
Chapter 1 – Application, Operation and Rates of Levy
Section 28 – Power of principal council to introduce levy on overnight stays in visitor accommodation
80.This section enables principal councils to introduce a visitor levy (”the visitor levy”) on overnight stays in visitor accommodation located within its area. The visitor levy is to be collected and managed by WRA on behalf of principal councils that introduce the visitor levy.
Section 29 – Overnight stays in visitor accommodation
81.An overnight stay in visitor accommodation forms the basis of the visitor levy, and subsection (1) defines when an overnight stay takes place namely when one or more people stay one or more nights under a contract at premises within a principal council area that has introduced the levy. The stay must be provided in the course of trade or business, and the accommodation must not the sole or main residence of the one or more persons.
82.Subsection (2) lists circumstances when an overnight stay in visitor accommodation does not take place. These circumstances include stays longer than 31 nights and accommodation arranged under the legislation listed (which relate to homelessness, immigration and asylum, and bail and probation). Subsection (3) provides that, where a person stays in visitor accommodation under an employment contract, contract for services or contract of apprenticeship with the VAP, no overnight stay takes place. Subsection (5) gives a power to the Welsh Ministers, by regulations, to amend the descriptions of circumstances in which an overnight stay in visitor accommodation does or does not take place. Regulations made under this power are subject to the affirmative procedure in the Senedd.
83.Under subsection (6) the Welsh Ministers may also, by regulations, make provision about the ways in which it may be proved that an overnight stay in visitor accommodation did not take place because the accommodation falls within subsection (2)(b). This could include provision about documents or other information that can be relied upon to prove that an overnight stay did not take place; and the making of arrangements for and relating to the issuing of vouchers that can be used to prove that an overnight stay in visitor accommodation did not take place. Regulations made under this power are subject to the affirmative procedure in the Senedd.
Section 30 – Liability to pay the levy
84.This section sets out that the person that is liable to pay the visitor levy on an overnight stay in visitor accommodation is the VAP. The point at which the liability to pay the visitor levy arises is when the entitlement under the contract to reside in or at the visitor accommodation ceases. This will generally be the point of departure of the final visitor entitled to reside under the contract.
85.Although liability rests with a VAP to pay the visitor levy, they are able to recover the liability from their visitors as part of their contractual terms should they wish. A VAP can therefore decide when and how to pass these costs on to visitors, be that at point of payment by a visitor, arrival at the visitor accommodation or departure from the visitor accommodation. The provider is ultimately liable and must ensure the amount they pay to WRA is correct.
Section 31 – Calculating the amount of the levy that is payable
86.This section sets out the method for calculating the amount of visitor levy that is chargeable in respect of a stay. The amount of visitor levy is calculated by establishing the number of leviable nights, and multiplying that number by the visitor levy rate that applies in relation to the accommodation. The two rates are set out in section 32 (the lower and higher rates).
87.When only one person was entitled to reside under the contract, then the total number of leviable nights is the number of nights that person was entitled to stay. When more than one person was entitled to stay under the contract, the calculation of leviable nights must be undertaken for each person and then added together to provide the total number of leviable nights.
88.Persons under the age of 18 staying in lower rated visitor accommodation are not included in the calculation of the amount of visitor levy payable in relation to the stay.
89.The section also states that if under a contract at least one person’s stay would be subject to the higher rate and at least one person’s stay would be subject to the lower rate, then liability is calculated by calculating the amounts of visitor levy payable separately and then adding them together. By way of example, this situation would arise where, under one contract with a VAP that provides both camping and self-catering accommodation in chalets, a person has arranged for some people to stay in a chalet and for some people to camp (see subsection (5)).
90.The Welsh Ministers may amend this section to make further provision about people who are not to be included in a calculation of the amount of visitor levy payable. These amendments may relate to overnight stays subject to the higher or lower rate, or both. Regulations made under this power are subject to the affirmative procedure in the Senedd.
Section 32 – Rates of the levy
91.This section sets out the two rates of the visitor levy; the lower rate is £0.75, the higher rate is £1.30. However, these rates are subject to any additional amount added by a principal council (see section 34).
92.The Welsh Ministers may amend the lower, higher or both rates by regulations. Regulations made under this power are subject to the affirmative procedure in the Senedd.
Section 33 – Determining which rate applies
93.This section specifies which types of visitor accommodation are subject to the lower and higher rates of the visitor levy. The lower rate applies to stays in visitor accommodation that is a pitch or area provided for camping, or a dormitory or other room or area normally provided on the basis that it may be shared with other people residing in that dormitory or other room or area under a different contract. For example, the lower rate would apply to a bed in a shared dormitory in a hostel provided for an overnight stay or a camping pitch. The higher rate applies to all other types of visitor accommodation.
94.The Welsh Ministers may, by regulations, amend which rate applies in relation to a particular type or description of visitor accommodation. Regulations made under this power are subject to the affirmative procedure in the Senedd.
Section 34 – Adding an additional amount to a levy rate
95.This section sets out that the Welsh Ministers may by regulations provide that a principal council may add an additional visitor levy amount to the lower and/or the higher rates, which may be expressed as a fixed or percentage amount.
96.Regulations made by Welsh Ministers under this section may allow a principal council to add an additional amount of visitor levy that is less than the amount specified in the regulations, and/or allow a principal council to add an additional amount in relation to only certain parts of its area or different amounts in relation to different areas. Regulations may also specify, or allow councils to specify, periods during which the additional amount does not apply, or when an additional amount that is less than specified in the regulations applies.
97.Subsection (4) sets out consultation requirements before the Welsh Ministers make regulations under this section. Regulations made under this section are subject to the affirmative procedure in the Senedd.
Section 35 – Application for repayment of amount equivalent to the levy
98.This section makes provision about the circumstances in which a person may apply for a repayment of an amount equivalent to the visitor levy payable (a “levy repayment”) in respect of an overnight stay in visitor accommodation that has taken place - in effect a ‘refund’ of all or part of the amount.
99.The section states that WRA may make a levy repayment if an application is made by a person that, under a contract, provided consideration in respect of an overnight stay and that the application is made before the end of the period of 90 days, beginning with the last day a person was entitled under the contract to stay.
100.A person may apply to WRA for a levy repayment in the following circumstances:
a person stayed overnight under the contract because they were unable to reside in their sole or main residence due to a risk to their health, safety or welfare (subsection (3)(a)),
a person stayed overnight under the contract because, at the time of the stay, they were otherwise homeless within the meaning of section 55 of the Housing (Wales) Act 2014 (subsection (3)(b)), or
a person who stayed overnight under the contract accompanied a person in receipt of a disability benefit (defined in section 35(7)) provided care, support or assistance to that person in the same premises and subsection (3) does not apply (subsection (4)).
101.Subsection (5) sets out that if WRA considers that an application has been made by a person who is eligible for a refund under subsection (3), WRA must repay an amount equivalent to the visitor levy payable for the stay. The repayment amount may be varied by WRA depending on the number of people who stayed and whether they were all eligible and the number of nights for which they were eligible for a refund.
102.Subsection (6) provides the same provision in effect ( as subsection (5)) in relation to the refund in respect of a person who provided care, support or assistance to a person in receipt of disability benefit (subsection (4)) but has been dealt with separately (from subsection (5)) to ensure that the repayment is limited to visitor levy paid in respect of a person providing care, support or assistance .
103.For example, a person may not be providing care, support or assistance to a person in receipt of a disability benefit for the entire duration of their stay. In which case, WRA must consider which nights qualify for a refund.
104.The Welsh Ministers may amend the section to add, remove, or change descriptions of circumstances in which WRA may or must make a repayment of a visitor levy amount, and to amend the definition of ”disability benefit”. Regulations made under this power are subject to the affirmative procedure in the Senedd.
Chapter 2 – Accounting for, and Payment of, the Levy
Section 36 – Duty to make levy return in respect of accounting period
105.A VAP must make a return to WRA for each accounting period, whether or not any overnight stays have taken place in the visitor accommodation that the VAP provides
106.The return must contain an assessment of the amount of visitor levy payable for the accounting period and also either a declaration by the VAP that the information in the return is true and complete to the best of their knowledge or a certification by the VAP’s agent that the VAP has made such a declaration.
107.A return must be made by the VAP on or before the filing date for the return. The filing date depends upon whether the VAP makes annual or quarterly returns (which is addressed in section 37). For an annual return the filing date is 31 May in the financial year following the financial year to which the return relates. A financial year is the period from 1 April in one year to 31 March in the following year. For a VAP that makes quarterly returns the filing date is 60 days following the end of the accounting period to which the return relates (see section 39).
Section 37 – Annual or quarterly return
108.This section provides that VAPs may choose to make annual or quarterly returns for a financial year if their expected visitor levy liability does not exceed £1000 and, if they made a return with respect to the preceding financial year, were not liable to pay an amount of visitor levy exceeding £1000 with respect to the preceding financial year. If a VAP's visitor levy liability is expected to exceed £1000, or exceeded £1000 in the previous financial year, they must make quarterly returns.
109.The Welsh Ministers have the power by regulations to change the figure of £1000 and to make provision about the information a VAP may or must provide to WRA if they wish to make annual returns. Regulations made under this power are subject to the affirmative procedure in the Senedd.
110.A change from annual to quarterly return obligations, or quarterly to annual return obligations, may take effect only at the start of a financial year. However, if a VAP has one or more penalty points, the VAP may not change the frequency with which they make returns.
Section 38 – Meaning of “accounting period”: annual returns
111.This section defines the accounting period for annual returns as the financial year and sets out, where a VAP commences leviable operations, the VAP’s first accounting period.
112.In this case, the accounting period begins on the date a VAP commences leviable operations and ends with the end of the financial year during which the accounting period began.
113.This section defines, for the purposes of this section and section 39, when a person commences leviable operations.
Section 39 – Meaning of “accounting period”: quarterly returns
114.This section defines the accounting period for VAPs making quarterly returns as a calendar quarter. A calendar quarter is defined as a period of 3 months ending with 31 March, 30 June, 30 September or 31 December. It sets out, where a VAP commences leviable operations, the VAP’s first accounting period.
Section 40 – Payment of the levy
115.The section details the rules for payment of the visitor levy to WRA by VAPs. VAPs must pay the visitor levy amount specified in their return on or before the filing date. The section also highlights provisions in the TCMA 2016 that address visitor levy payments required to be made by VAPs in other situations, such as corrections to a return, amendments made to a return during or after the completion of an enquiry and WRA determinations and assessments.
Section 41 – Persons that have ceased to be a VAP: duties under this Chapter
116.This section ensures that if a VAP was subject to duties immediately before ceasing to be a VAP then they remain subject to those duties which in this context are the duties to make a return and if required, to make a levy payment to the WRA. Subsection (2) preserves the effect of certain provisions and subsection (3) sets out the position when the former VAP becomes a VAP again.
Section 42 – Collection and management of the levy by WRA
117.This section introduces Part 2 of Schedule 2 to the Act which contains amendments to the TCMA 2016 to make provision about WRA’s functions in relation to the visitor levy together with other miscellaneous amendments.
Chapter 3 – Use of Proceeds of Levy by Principal Councils
Section 43 – Principal council account for proceeds of the levy
118.This section requires a principal council that has introduced the visitor levy to maintain a separate account for the proceeds of that visitor levy. The section also provides a definition of the “proceeds of the levy”. The proceeds of the levy are the net revenues a principal council receives after the costs of collection and disbursements are deducted (see section 24A of the TCMA 2016, as inserted by Part 2 of Schedule 2 to the Act).
Section 44 – Use of proceeds of the levy for destination management and improvement
119.This section requires a principal council to use the proceeds of the levy for the purposes of destination management and improvement in its area.
120.Subsection (2) provides a non-exhaustive list of destination management and improvement purposes including mitigating the impact of visitors, promoting the Welsh language, supporting the sustainable economic growth of tourism and travel, and providing and improving infrastructure, facilities and services for visitors (even if they are not exclusively used by visitors).
Section 45 – Report on use of proceeds of the levy
121.This section places a duty on a principal council to publish a report on the use of the proceeds of the levy for each financial year the council received proceeds of the levy. The report must include information about the amount of visitor levy received by the council in the financial year in question. The report must also set out how the proceeds have been or will be used for the purposes of destination management and improvement. Prior to publication, a principal council must send a draft report to members of the levy partnership forum established by the council (see section 46) and consult them on that draft.
122.The council must publish the report on their webpages (see section 66 (3)(a)(i)) as soon as practicable after 30 June in the financial year following the financial year to which the report relates, and no later than the end of the financial year following the financial year to which the report relates.
123.The Welsh Ministers may by regulations amend this section to set out requirements for the content of the reports, and to change the number of reports that must be published for a financial year, the frequency of publication and the date by which they must be published. Regulations made under this power are subject to the affirmative procedure in the Senedd.
Section 46 – Levy partnership forums
124.This section states that if a principal council has introduced the visitor levy in its area then it must establish a forum to discuss visitor levy-related issues with a view to providing a council with information and advice on certain matters.
125.The section details the matters the forum is to provide information and advice on as well as requiring a principal council to have regard to it.
126.The section also details the steps that must be taken by a principal council to facilitate the forum and makes provision regarding its membership.
Chapter 4 – Introducing, Changing Or Abolishing the Levy
Section 47 – Consultation before introducing, changing or abolishing the levy
127.This section makes provision about the steps a principal council must take before it introduces or abolishes the visitor levy, or (where Welsh Ministers have made regulations under section 34 enabling councils to do so) adds, changes or removes an additional amount of visitor levy.
128.If the Welsh Ministers have made regulations under section 34 enabling principal councils to make changes to the amount of visitor levy payable in their areas, councils may not take any steps to change the amount of visitor levy payable until 12 months after the visitor levy has come into effect in their area.
129.A principal council must notify WRA of its proposal in respect of the visitor levy and publish a report that sets out the proposal.
130.Where a principal council proposes to introduce the visitor levy, it must publish a report including an estimate of the proceeds of the levy in the first full financial year, an estimate of the costs it is likely to incur, how it intends to use the proceeds for destination management and improvement of a council’s area and proposals for membership of the levy partnership forum.
131.Where a principal council proposes to change the amount of visitor levy, it must publish a report including an estimate of the proceeds of the levy in respect of the first full financial year after the visitor levy is changed, and information about how it intends to use those proceeds towards destination management and improvement of a council’s area.
132.Where a principal council proposes to abolish the visitor levy in its area it must provide an estimate of the impact on its revenues in the first full financial year after the visitor levy is abolished.
133.In each case, a principal council must send its report to WRA and consult the mandatory consultees (see subsection (6)), and other appropriate persons, on its report and proposal in respect of the visitor levy.
134.A principal council must consider its proposal having regard to the responses received during the consultation. It must then notify WRA as to whether it intends to proceed with its proposal in relation to the visitor levy, publish a final report and send that report to WRA.
135.The final report must set out a principal council’s intentions in relation to its proposal and where it intends to proceed with its proposal, the details of that proposal (including highlighting of any changes made to the proposal from that which was consulted on). The final report must also include a summary of the representations received during the consultation.
136.Subsection (10) defines certain terms used in this section that relate to the mandatory consultees as well as “destination management and improvement”.
137.Subsection (11) permits principal councils to commence consultation and notification requirements as set out in this section ahead of the section coming into force.
Section 48 – Introduction of the levy and changes to or abolition of the levy
138.The section outlines the process for introducing, changing the amount of, or abolishing the visitor levy once a principal council has complied with section 47.
139.A principal council must publish a notice detailing whether it is introducing, changing or abolishing the visitor levy; the visitor levy rates (unless the visitor levy is to be abolished); the date when the visitor levy will either come into effect, cease to have effect or change; and any other appropriate information. The notice must be published on a council's website and in any other manner considered appropriate.
140.The date for the introduction or abolition of the visitor levy must be at least 12 months after the notice is published, unless a shorter period is agreed upon by a council and WRA, and must be either 1 April or 1 October.
141.The date for a change to the visitor levy must be at least 6 months after the notice is published and must be either 1 April or 1 October.
142.The introduction, abolition, or change to the visitor levy takes effect on the date specified in the notice.
Section 49 – Overnight stays that are unaffected by the introduction of, or changes to, the levy
143.The section outlines the effect of the introduction of or change to the visitor levy on overnight stays arranged before the introduction or change takes place.
144.No visitor levy will be payable if the “relevant contract” for the overnight stay was made before the date that is six months after the date on which the principal council decided to introduce the visitor levy.
145.However, if such a contract is varied on or after that date, the visitor levy is payable in relation to (a) any persons that are entitled to reside as a result of the variation and/or (b) any nights on which a person is entitled to reside as a result of the variation.
146.If there is a change to the amount of the visitor levy, it does not apply in relation to an overnight stay if the relevant contract was made before the principal council decided to change the visitor levy.
147.The “
148.Subsection (7) defines the date a principal council decides to introduce or change the visitor levy as the date it publishes the related notice under section 48(2).
Section 50 – Interpretation of Chapter
149.This section defines terms that are used in this Chapter.
Chapter 5 – Miscellaneous Provision Relating to the Levy
Section 51 – Visitor accommodation at premises within the area of more than one principal council
150.This section makes provision about the treatment of premises at which visitor accommodation is provided that are not entirely within the area of one principal council. For the purposes of the visitor levy, such premises are to be treated as being in the area where the greater or greatest part of the premises is situated.
Section 52 - Arrangements with third party to collect the levy etc. on behalf of provider
151.Subsection (1) permits a VAP to make arrangements for one or more persons, on their behalf, to collect sums equivalent to the amount of the visitor levy payable in respect of a stay, make returns, or pay the visitor levy, to WRA, or issue repayments.
152.Subsection (2) provides that the making of an arrangement under subsection (1) does not affect a VAP’s obligations under the Act or the TCMA 2016.
Section 53 - Welsh Ministers’ power to impose advertising and billing etc. requirements
153.This section provides the Welsh Ministers with a regulation making power to impose requirements on VAPs relating to the inclusion of information about the amount of the visitor levy payable on an overnight stay in visitor accommodation in invoices, receipts and other documents, and requirements about when and how a VAP is required to inform visitors of the visitor levy’s existence, nature and amount. Regulations made under this power are subject to the affirmative procedure in the Senedd.
154.The regulations may require that, when the amount payable for an overnight stay is provided, the amount of visitor levy payable in respect of the stay is also specified; that promotional, marketing and other relevant material includes details of the amount of visitor levy payable; and that information relating to the visitor levy payable is displayed at the visitor accommodation.
155.The regulations may confer a power to impose civil sanctions on persons that fail to comply with the requirements set out in any regulations made under this section and may make provision for appeals against such civil sanctions.
Section 54 - Exercise by a principal council of its functions under this Part etc.
156.Subsection (1) disapplies section 101 of the Local Government Act 1972 (arrangements for discharge of functions by local authorities) from the functions of a principal council under this Part (and section 61(2)), which means such functions are non-delegable to a committee, a sub-committee or an officer of a council or to another council. This does not prevent, for example, an officer of a council from preparing a draft of a report for full council to consider and decide upon.
157.The Welsh Ministers have a regulation-making power in subsection (2) to amend this section for the purpose of disapplying (or reapplying) subsection (1) in relation to a function of a principal council under this Part (and section 61(2)). The effect of disapplying subsection (1) would be to make some or all principal council functions in this Act delegable under section 101 of the Local Government Act 1972. Regulations made under this power are subject to the affirmative procedure in the Senedd.
158.Subsection (3) inserts functions of a principal council relating to the visitor levy into the Local Authorities (Executive Arrangements) (Functions and Responsibilities) (Wales) Regulations 2007 (S.I. 2007/399) as functions not to be the responsibility of an executive.
