Schedule 2 – Amendments Relating to Parts 2 and 3
Part 2 Amendments Relating to Part 3 of This Act
225.Part 2 of Schedule 2 is introduced by section 42 and contains amendments to the TCMA 2016 relating to Part 3 of this Act (visitor levy).
Paragraph 21 - Amendment of references to “devolved tax” etc. in the TCMA 2016
226.This paragraph sets out that, other than the listed exceptions, where “devolved tax” appears in the TCMA 2016 the wording is to be replaced by “WRA-collected” tax. These amendments allow WRA to manage and collect the visitor levy, as well as the devolved taxes, under the same provisions within the TCMA 2016 (though in some instances the TCMA 2016 will apply differently in relation to the visitor levy, as opposed to the devolved taxes; this is addressed by the majority of the remainder of the amendments in this Part).
Paragraphs 22 to 30 - Amendments to Part 2 of the 2016 Act
227.Paragraph 22(a) amends section 12(2)(b) of the TCMA 2016 in consequence of the amendments made by paragraph 2 to enable WRA to provide information and assistance relating to the visitor levy, as well as the devolved taxes, to taxpayers, their agents and other persons.
228.Paragraph 22(b) amends section 12(2) to insert a new paragraph to include the provision of information, advice and assistance related to the visitor levy to principal councils as a particular function of WRA.
229.Paragraph 23 amends section 15 of the TCMA 2016 (which enables the Welsh Ministers to give to WRA directions of a general nature) to insert a new subsection (1A) to provide that, before the Welsh Ministers give a direction relating only to WRA's functions concerning the visitor levy, the Welsh Ministers are required to consult each principal council that has introduced or decided to introduce the visitor levy.
230.Paragraph 24 amends section 18(1) of the TCMA 2016 to permit the disclosure of protected information where that disclosure is for the purposes of WRA’s functions. Limitations are set on this permitted disclosure so that protected information cannot be disclosed when providing the Welsh Ministers with information, advice and assistance in relation to WRA-collected taxes or other matters on which the Welsh Ministers may from time to time require information, advice or assistance. A similar limitation is placed on this permitted disclosure so that protected information cannot be disclosed when providing principal councils with information, advice and assistance in relation to the visitor levy.
231.Paragraph 25 inserts a new section 24A into the TCMA 2016. Subsection (1) requires WRA to maintain separate accounts for visitor levy proceeds for each county or county borough. Subsection (2) requires WRA to pay these proceeds to the relevant principal council annually by 30 June following the end of the financial year in which the proceeds were collected, or by such other date agreed between WRA and a principal council. Subsection (3) requires the payment to a principal council to be after the deduction of WRA’s costs incurred in exercising its functions. Subsection (4) allows WRA to deduct such amounts as it considers appropriate in respect of costs it may incur and disbursements that may become payable in connection with the exercise of its functions during that financial year but after it has paid the proceeds for that year to a principal council. Subsection (5) enables the Welsh Ministers to make regulations which set out further provision about the deduction of amounts in respect of costs, or the deduction of disbursements including, amongst other matters, how these costs are apportioned and specifying the types of costs or disbursements that may, must, or must not be deducted. Subsection (6) states that references to proceeds include any financial penalties collected. In addition, payments to councils under subsection (2) are not disbursements.
232.Paragraph 26 amends section 25 of the TCMA 2016 to ensure that only payments of receipts relating to devolved taxes (and not the visitor levy) should be paid into the Welsh Consolidated Fund. It also introduces a new subsection (3) to ensure that WRA must pay amounts deducted for costs from proceeds of the visitor levy into the Welsh Consolidated Fund.
233.Paragraph 27 amends section 26(2) of the TCMA 2016 so that WRA’s Charter of standards and values applies both to WRA’s responsibilities for the devolved taxes and to the visitor levy. It also adds a reference to “principal councils”.
234.Paragraph 28 amends section 27 of the TCMA 2016 to provide that before WRA is able to submit its corporate plan for approval by the Welsh Ministers, WRA must consult each principal council that has introduced, or decided to introduce, the visitor levy in its area on any objectives, outcomes or activities in the plan that relate to the visitor levy.
235.Paragraph 29 amends section 29 of the TCMA 2016 by introducing a new subsection (2A) that places an obligation on the Welsh Ministers to consult with each principal council that has introduced, or decided to introduce, the visitor levy before giving a direction to WRA under subsection (1)(b) that relates only to the visitor levy.
236.Paragraph 30 amends section 30 of the TCMA 2016 to place an obligation on the Welsh Ministers to consult with each principal council that has introduced, or decided to introduce, the visitor levy before giving a direction to WRA under subsection (1) that relates only to the visitor levy.
237.Paragraph 31 amends section 31 (audit) of the TCMA 2016 so that it also refers to section 24A (payments of net proceeds of the visitor levy to principal councils), inserted by paragraph 25 of Schedule 2 to this Act. This requires the Auditor General for Wales to be satisfied, when examining the Statement submitted under this section, that any deduction of disbursements have been made in accordance with section 24A.
Paragraphs 32 and 33 - Amendments to Part 3 of the 2016 Act
238.Paragraph 32 amends section 40 of the TCMA 2016 to provide a definition of ”filing date“ for a return related to the visitor levy.
239.Paragraph 33 amends section 58 of the TCMA 2016 (conditions for making WRA assessments). It amends the conditions for making WRA assessments to include a new subsection (5), which specifies that information is considered available to WRA if it is in a tax return, in documents produced or information provided for an enquiry, or if its existence could be reasonably inferred by WRA from a tax return, documents produced, or information provided for an enquiry, or its existence is notified in writing to WRA by the taxpayer or their agent. This changed rule will apply to the visitor levy and devolved taxes.
Paragraphs 34 and 35 - Amendments to Part 3A of the 2016 Act
240.Paragraphs 34 and 35 make amendments to Part 3A of the TCMA 2016 to provide that the general anti-avoidance rule does not apply to the visitor levy.
Paragraph 36 - Amendment to Part 4 of the 2016 Act
241.This paragraph amends section 86 of the TCMA 2016 to remove the requirement for WRA to seek the approval of the tribunal before issuing a notice to the taxpayer requiring them to provide information or produce documents. This changed rule will apply to the visitor levy and devolved taxes.
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.
Paragraph 49 - Amendments to Part 8 of the TCMA 2016
264.Paragraph 49 amends section 172(2) of the TCMA 2016 to introduce two new appealable decisions. The first is a decision relating to a penalty point for failure to make a return. The second is a decision to issue a taxpayer notice, or to include a particular requirement in such a notice, if the issuing of the notice had not been approved by the tribunal.
Paragraphs 50 to 55 - Amendments to Part 10 of the TCMA 2016
265.Paragraph 50 inserts a new section 187B into the TCMA 2016 in respect of Crown application in relation to the visitor levy and ensures that the TCMA 2016 binds the Crown (in the same way that the Act binds the Crown). Subsection (2) states that TCMA 2016 does not make the Crown criminally liable but it applies to persons in the service of the Crown as it would apply to other persons. Note: Section 187B is amended by Part 1 of this Schedule (see paragraph 16) to also apply in relation to WRA’s functions under Part 2 of the Act (register of visitor accommodation providers) in the same terms.
266.Paragraph 51 amends section 189(2) of the TCMA 2016 to provide that the regulation making power provided to the Welsh Ministers by the new section 24A of the TCMA 2016 is subject to the affirmative procedure in the Senedd.
267.Paragraph 52 amends section 190 of the TCMA 2016 regarding the issuing of notices by WRA to apply it in relation to this Act. Furthermore, the amendments provide that the address for the most recent tax return sent to WRA is also a proper address for the purposes of serving a notice. This new rule will apply to notices relating to the visitor levy and devolved taxes.
268.Paragraph 53 amends section 191 of the TCMA 2016, which relates to the giving of notices or information to WRA, for it to apply in relation to this Act.
269.Paragraph 54 amends section 192, the interpretation section of the TCMA 2016, to omit the definition of “devolved taxpayer” and include, “principal council”, “taxpayer”, “visitor levy” and “WRA-collected tax”. A new subsection is added to provide a definition of the point at which a principal council has decided to introduce the visitor levy in its area.
270.Paragraph 55 amends section 193 of the TCMA 2016 to insert additional terms into the index of defined expressions: “Devolved tax return”, “Principal council”, ”Principal council that has decided to introduce the visitor levy”, “Taxpayer”, “Visitor accommodation provider”, “Visitor levy”, “Visitor levy return” and “WRA-collected tax”.
