10.Subsection (1) establishes the tax and gives it the label of “Scottish aggregates tax”, stating that is to be charged on aggregate when it is subjected to commercial exploitation in Scotland.
11.Subsection (2) gives Revenue Scotland the responsibility for the collection and management of Scottish aggregates tax.
12.This section gives an overview of Part 1 of the Act’s provisions relating to the new tax.
13.This section defines the meaning of the word “aggregate” for Part 1 of the Act: this definition is subject to section 4 on excepted processes however.
14.Subsection (1) makes further provision about the meaning of “
15.Subsection (2) then defines what “excepted processes” are. This includes, for example, the manufacturing of cement from limestone, and any process by which a “relevant substance” is extracted or otherwise separated from any aggregate, with the “relevant substances” in question listed in subsection (3). Under subsection (4) the Scottish Ministers have the power to alter this list by regulations subject to the negative procedure.
16.This section sets out the fundamental legal basis of the new Scottish aggregates tax, that tax is only to be charged on taxable aggregate as defined here: that is, on any occasion on which aggregate is subject to commercial exploitation in the circumstances set out in section 7 of the Act, it is taxable, unless specifically exempted under section 6.
17.This section defines the types of aggregate that are exempt from Scottish aggregates tax, setting out each exemption in subsections (2) to (8).
18.Subsection (2) provides that aggregate is exempt from the tax if it is, or derives from, any aggregate that has already been subjected to a charge to tax. Subsection (9) clarifies that for these purposes aggregate has already been subjected to a charge to tax, and therefore this exemption will apply, if there was no entitlement to a tax credit against at least some of the tax previously charged on the aggregate – or if there was, then the amount of the credit was less than the amount of the tax. So conversely, if there has previously been tax credit applied of the same amount than the amount of tax, then the exemption from tax under subsection (2) would not apply, and tax would be chargeable.
19.In addition, subsection (10) provides that previous tax credits relating to specific industrial or agricultural processes (see section 15(6) of the Act) are to be disregarded for these purposes, and so in such cases, the previous tax is effectively counted as tax in which there was no entitlement to tax credit – so the exemption under subsection (2) would still apply.
20.Finally, subsection (9)(b) provides that the exemption under subsection (2) would also apply where, before the date on which section 6 of the Act comes into force, there has been an occasion on which a charge to the UK aggregates levy has arisen under the Finance Act 2001.
21.Subsection (3) provides that aggregate is exempt from the tax if it has previously been used for construction purposes (including before the Act comes into force).
22.Subsection (4) provides that aggregate is exempt from the tax if, on the date on which this section comes into force, it is on a site other than either its originating site (see section 9) or a site that is required to be registered under section 18 under the name of the site operator.
23.Subsection (5) provides that aggregate is exempt from the tax if it consists wholly of aggregate won by being removed from the ground incidentally during the excavation of transport or utilities infrastructure (for instance during the building of roads), and in connection with the construction, modification or improvement of that structure or infrastructure.
24.Subsection (6) provides that aggregate is exempt from the tax if it consists wholly of aggregate won in the course of dredging carried out exclusively for the purpose of creating, restoring, improving or maintaining a river, canal, watercourse, channel or approach.
25.Subsection (7) provides that aggregate is exempt from the tax if it consists wholly of the spoil from any process by which coal, lignite, slate, or a substance listed in section 4(3) of the Act has been separated from other rock after being extracted with that other rock.
26.Subsection (8) provides that aggregate is exempt from the tax if it consists wholly or mainly of the substances listed, including coal.
27.This section sets out how the commercial exploitation of aggregate is defined for the purposes of Part 1 of the Act.
28.Subsection (1) provides that a quantity of aggregate is subjected to exploitation if it is removed from a site falling within subsection (2), i.e. from the originating site of the aggregate (see section 9); from a site which is not the originating site of the aggregate but is registered under the name of the same owner; or from a site not falling within those categories to which the quantity of aggregate had been removed for the purpose of having an excepted process (see section 4) applied to it, but at which no such process had in fact been applied to it.
29.A quantity of aggregate is also subjected to exploitation if it becomes the subject of an agreement to supply it to any person. For these purposes (as per subsections (5)-(6)) the time when a quantity of aggregate becomes the subject of an agreement to supply it to any person is either when the agreement is entered into, or in a case where the quantity of aggregate is not separately identifiable when the agreement is entered into, at the time when it is appropriated to the agreement. However, any supply effected by the transfer or creation of land rights is not included within the definition of “
30.A quantity of aggregate is also subjected to exploitation if it is used for construction purposes, e.g. in building sites.
31.A quantity of aggregate is also subjected to exploitation if it is mixed, otherwise than in permitted circumstances, with any material or substance other than water. Aggregate is often mixed with other substances in the production of materials such as concrete and asphalt. For these purposes (as per subsection (7)) a quantity of aggregate is mixed with a material or substance in permitted circumstances if the material or substance with which it is mixed consists wholly of a quantity of taxable aggregate that has not previously been subjected to commercial exploitation in Scotland, and the mixing takes place on a site which, in a case where it falls within subsection (2) in relation to any part of the aggregate included in the mixture, so falls in relation to every part of it.
32.Subsection (3) clarifies that exploitation is commercial exploitation if it is carried out in the course or furtherance of a business carried on by the person (or one of the persons) responsible for subjecting it to exploitation. For these purposes, “
33.Subsection (4) sets out exceptions to the definition of commercial exploitation for the purposes of Part 1 of the Act. This includes cases where aggregate is removed from one registered site to another, where both sites are registered under the name of the same person: this allows for circumstances where aggregate is moved between sites for processing or storage before being used or sold, Subsection (4) also includes cases where aggregate is moved to a registered site for the purpose of having an excepted process (as defined in section 4) applied to it on that site.
34.Subsection (8) provides that for the purposes of Part 1 of the Act, the exploitation of a quantity of aggregate is taken to occur in Scotland if the aggregate is in Scotland at the time when it is subjected to exploitation, or where aggregate is subjected to exploitation under subsection (1)(a) or (b) as a result of the movement of aggregate to Scotland from elsewhere in the UK.
35.Subsection (10) gives the Scottish Ministers a regulation-making power, subject to the affirmative procedure, in order to make further provision about the circumstances in which the exploitation of aggregate is taken to occur in Scotland for the purposes of subsection (8) of this section. Regulations under subsection (10) may amend subsection (8) and other provisions of the Act to make provision of that kind.
36.Subsection (12) applies to the occupation of a site by agriculture or forestry businesses. In such a case the exception to commercial exploitation at subsection (4)(d) applies in a modified form: so no commercial exploitation occurs if aggregate returns to the land at the site from which it was won, or at a site occupied by the same business, but the exception applies without the need for this to take place by virtue of the aggregate being used for a purpose connected with winning aggregate or other minerals from the site in question.
37.This section sets out the fundamental rule that the persons liable to pay the tax charged on a quantity of taxable aggregate are the persons responsible for subjecting it to commercial exploitation. Subsection (2) then defines responsibility for these purposes. This depends on the type of commercial exploitation that takes place: for instance, where commercial exploitation of aggregate takes place when is not on its originating site or a connected site, and the exploitation consists of using the aggregate for construction purposes, the person liable to pay tax is the person responsible for using it for those purposes; if the exploitation consists of supplying the aggregate, then the person liable to pay tax is the supplier.
38.Subsection (3) clarifies that exploitation of aggregate is only defined as commercial exploitation for the purposes of Part 1 of the Act if the exploitation takes place in the course of a business carried on by a person: and for these purposes this includes any activity of the Scottish Administration, the UK government, or of a local authority or charity).
39.Subsection (4) provides that the term “
40.Subsection (5) provides that where there is a supply chain arising from an agreement to supply aggregate, every person in the chain is liable to pay the total amount of tax chargeable on the aggregate as a result of the original agreement, unless they have acquired the aggregate from a supplier who is registered for tax under section 17 of the Act (the purpose being to prevent the creation of an artificial chain in order to avoid liability for tax).
41.Subsection (6) provides for joint and several liability where more than one person is charged with the tax by virtue of this section: this means that each person involved is responsible for the full liability of the tax, and if one person is unable to pay, the others are liable for paying that person’s share.
42.This section defines the term “
43.Where aggregate has been mixed on a site before the Act comes into force, subsection (2) states that that site is taken to be the originating site of all the aggregate comprised in the mixture.
44.This section sets out how an operator of an aggregate site is defined for the purposes of Part 1 of the Act. This means the occupier of a site and also, if any other person exercises control over aggregate on that site, that other person.
45.Subsection (2) provides that exercising control over aggregate means that the person wins aggregate from that site, stores it there, or carries out an excepted process (as defined in section 4) at that site.
46.This section gives a regulation-making power to the Scottish Ministers to make provision about determining the weight of any aggregate for the purposes of calculating the tax. These regulations are subject to the affirmative procedure.
47.The regulations may specify rules for determining the weight directly, authorise rules for determining the weight to be specified by Revenue Scotland, or authorise rules for determining the weight to be agreed between taxpayers and a person designated by Revenue Scotland. Such rules may concern the method by which the weight is to be determined, the time by reference to which the weight is to be determined, and the discounting of constituent ingredients from the calculation of weight. The rules may be provided for as only applying in certain cases or on certain conditions.
48.Subsection (1) of this section provides that the amount of tax charged on taxable aggregate is calculated by multiplying the applicable rate of tax by the weight in tonnes of the taxable aggregate. Then subsection (2) clarifies that where a quantity of taxable aggregate weighs only part of a tonne, the amount of tax charged is to be reduced in proportion to the weight.
49.Under subsection (3), the Scottish Ministers may make regulations specifying the applicable rate (or rates) of tax for the purposes of this section. Under section 61(2) of the Act, these regulations are subject to what is known as the “provisional affirmative” or “made affirmative” procedure whereby the regulations are made by the Scottish Ministers, and therefore have effect from when they are made, but must be laid before the Scottish Parliament and will cease to have effect after 28 days unless they are approved by resolution of the Parliament.
50.This section of the Act amends section 108 of the 2014 Act, which relates to situations where subordinate legislation intended to change the tax basis of a devolved tax by means of the provisional affirmative procedure applies for a period but is not subsequently approved by the Scottish Parliament within 28 days of it being laid.
51.When such an instrument is made, the changes to the tax basis set out in it (which in the case of regulations under section 12 of the Act might be changes to the tax rate for aggregates tax) can apply immediately, so taxpayers’ liability will change as soon as the instrument is made: but if the proposed changes are not approved by Parliament within 28 days, then the instrument falls. Section 13 of the Act amends section 108 so that in such a situation, a taxpayer can make a claim for repayment of the amount of additional aggregates tax paid during the period when the instrument was in force.
52.The section also changes references to “order” to references to “instrument”, reflecting that regulations are the preferred form of statutory instrument in modern drafting practice.
53.Subsection (2) of section 108 allows a taxpayer to make a claim to Revenue Scotland for the amount of additional tax paid because of the instrument that fell, and any related penalty or interest. Subsection (5) provides that any claim must be made within two years of the “relevant date” which is defined in subsection (6).
54.Where a contract to supply aggregate has been entered into, and there is a change to the amount of tax chargeable in relation to the supply of the aggregate referred to in the contract, this section provides that the amount of payment due in return for the aggregate is to be adjusted so that the cost of the tax, to the extent that it would otherwise have been borne by the supplier, is borne instead by the person paying for the aggregate. However the parties to the contract can agree to disapply this rule.
55.This section gives a regulation-making power, subject to the negative procedure, for the Scottish Ministers to create tax credits in relation to the payment of Scottish aggregates tax. Such tax credits would be offset against a taxpayer’s liability to pay the tax: this section creates several categories of tax credit for the purposes of Scottish aggregates tax.
56.As per subsection (3), the regulations creating tax credits may include cases where any quantity of taxable aggregate is moved outwith Scotland to a place in the rest of the UK, or to UK waters. As per subsection (4), they may also include cases where any quantity of taxable aggregate is exported outwith the UK from a place in Scotland.
57.As per subsection (5), the regulations may include cases where any quantity of taxable aggregate has an excepted process applied to it – a term defined in section 4 of the Act. As per subsection (6) they may also include cases where any quantity of taxable aggregate is used in an industrial or agricultural process set out in the regulations. As per subsection (7) they may include provision cases where any quantity of taxable aggregate is disposed of (by dumping or otherwise) for purposes unrelated to construction.
58.In addition, as per subsection (8), the regulations may include cases where the whole or part of a debt which is due to the person liable to pay the tax is written off in the person’s accounts as a bad debt, as defined in the regulations.
59.This section makes further and general provision about the regulation-making power to create tax credits conferred on the Scottish Ministers by section 15.
60.This includes that regulations under section 15(1) may make provision as to how to make an application to claim tax credit, and that payment of credit can be made subject to such conditions as Revenue Scotland considers appropriate (see subsection (4)). In addition the regulations may provide that where a tax credit is due to a taxpayer who has previously failed to submit tax returns, Revenue Scotland may withhold payment of the credit until the taxpayer has complied with that requirement to submit a return (see subsection (2)).
61.Subsection (1) of this section places a duty on Revenue Scotland to maintain a register containing whatever information it deems required for the purposes of the collection and management of Scottish aggregates tax. Subsections (2) to (6) set out the content of the register and make further provision on Revenue Scotland’s powers concerning the register, including giving authorisation to Revenue Scotland to publish information in the register despite any prohibition within devolved competence that might otherwise apply.
62.Subsection (1) of this section imposes a duty to register for Scottish aggregates tax on a person who carries out a taxable activity: this is defined in subsection (2) as being responsible for subjecting a quantity of aggregate to commercial exploitation (see sections 7 and 8 of the Act).
63.Subsection (3) imposes a duty on a person who has not yet registered for tax to notify Revenue Scotland of their intention to carry out taxable activities, at either the point of carrying them out or, if earlier, the point of forming the intention to do so.
64.Subsection (4) deals with the time of registration by Revenue Scotland, fixing it to the point at which a person carries out taxable activities: where a person is liable to be registered by virtue of subsection (1), Revenue Scotland may register the person with effect from that time.
65.Subsection (5) gives a regulation-making power to the Scottish Ministers to grant exemptions from registration and related requirements. Such regulations will be subject to the affirmative procedure.
66.Subsection (6) makes further provision on what regulations under subsection (5) may contain, including for equivalent provision to section 74 of the 2014 Act (on record-keeping duties) to apply to persons who are exempt from registration.
67.Subsection (7) defines a registrable person for the purposes of Part 1 of the Act.
68.Subsection (8) clarifies the position on registration for groups of bodies corporate (see section 29 of the Act).
69.Subsection (1) of this section imposes a duty on a taxpayer to notify Revenue Scotland if they cease to have the intention of carrying out taxable activities.
70.Subsection (3) empowers Revenue Scotland to cancel a person’s registration where it is satisfied that a person has ceased to carry out taxable activities, with effect from the earliest practicable time afterwards.
71.Subsection (4) deals with the cancellation of registration after notification under subsection (1), providing that Revenue Scotland has a duty to cancel registration if satisfied that no tax is due from, or credit is due to, the person who carried out the notification.
72.Subsection (5) deals with the situation where a person has never carried out taxable activities and Revenue Scotland is satisfied that it never will do, providing that Revenue Scotland has a duty to cancel their registration in such circumstances.
73.Subsections (6) and (7) make provision on how Revenue Scotland is to cancel registration where a registered person becomes exempted from the requirement to be registered by virtue of regulations under section 18(5).
74.This section places a duty on a person who is not registered for Scottish aggregates tax and is subject to an exemption under section 18(5) – i.e. because they carry out the production of exempt aggregate – to notify Revenue Scotland of that fact in accordance with regulations. The circumstances for notification are to be set out in regulations.
75.This section concerns compulsory registration by Revenue Scotland. Where it appears to Revenue Scotland that a person is operating or using any premises, or intends to do so, for the purposes listed in subsection (2) relating to the production of aggregate, and has not already registered (perhaps due to an erroneous belief that they don’t need to do so), Revenue Scotland is empowered to register those premises against that person’s name in the Scottish aggregates tax register.
76.Subsection (3) provides that the particulars included in the register for premises subject to compulsory registration under subsection (1) must set out the boundaries of the site in a way best designed to prevent the avoidance of tax.
77.Subsection (4) provides that any question as to the boundaries of originating sites for the purposes of this Part of the Act are to be determined conclusively in accordance with the register.
78.This section gives a regulation-making power to the Scottish Ministers to make further provision on registration for Scottish aggregates tax in the terms listed, including the specification of times for the making of notifications to do with registration in sections 18 to 20, and the form and content these notifications are required to take. Regulations under this section will be subject to the negative procedure.
79.This section gives a regulation-making power to the Scottish Ministers to provide that a registrable person must account for the payment of Scottish aggregates tax by reference to specific accounting periods; must make returns in relation to those periods; and must pay tax by the deadlines and in the manner set out in the regulations. Such regulations will be subject to the negative procedure and may make the further provision listed in subsection (2): including provision for tax to be treated, in particular circumstances, as due for a different period to the period it would ordinarily be accounted for; provision for the correction of errors in returns; provision for the relaxation of particular requirements; and provision for the calculation of interest.
80.This section provides that tax returns for Scottish aggregates tax must meet Revenue Scotland’s specifications in terms of their content and form.
81.This section provides that notices, applications or other communications that taxpayers make to Revenue Scotland must meet Revenue Scotland’s specifications in terms of their content and form.
82.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision in order to ensure, where a taxpayer is not resident in the UK, that they arrange for the appointment of a person resident in the UK to act as their representative for the purposes of paying Scottish aggregates tax. Subsection (2) defines a “non-resident taxpayer” as a person who is not resident in the UK and who is registered, or is required to be, for the purposes of the tax (or would be required but for an exemption in regulations made under section 18(5) of the Act). The regulations will be subject to the negative procedure.
83.The regulations may make (but are not limited to) the kinds of provision listed in subsection (3): including a requirement for initial notification by taxpayers of a change in residence status to Revenue Scotland; a requirement for approval by Revenue Scotland of an appointment of a tax representative; and the creation of a process for requesting such approval. Failure to request approval may be penalised by virtue of section 216C of the 2014 Act, as inserted by section 45 of this Act.
84.This section provides for the effect of the appointment of a tax representative by a taxpayer: they are entitled to act on a non-resident taxpayer’s behalf and must make sure that the taxpayer complies with their legal obligations under the Act in relation to Scottish aggregates tax.
85.In addition, subsection (3) of this section makes a tax representative personally liable in respect of any failure of compliance by the non-resident taxpayer with the requirements of this Act, and imposes joint and several liability on the tax representative and the non-resident taxpayer in respect of any such failure (meaning that each person would be responsible for the full liability for the failure).
86.Subsection (4) clarifies that a tax representative does not themselves have to register for Scottish aggregates tax.
87.Subsection (5) provides that a non-resident taxpayer will themselves be liable in respect of any tax due as a consequence of fraud or error by their tax representative.
88.This section of the Act amends section 141 of the 2014 Act to apply a new definition of “
89.Generally this means premises that a designated officer of Revenue Scotland has reason to believe are used in connection with the carrying on of a business by or on behalf of a person. But in relation to Scottish aggregates tax, it does not include the premises of any tax representative within the meaning of this Act (i.e. the person who in accordance with regulations under section 26 acts as a taxpayer’s representative for the purposes of Scottish aggregates tax).
90.Section 141(3B) of the 2014 Act clarifies that tax representatives may still be specified in regulations by the Scottish Ministers under section 142 of the 2014 Act as “involved third parties” whose business premises may be entered and inspected by designated officers of Revenue Scotland.
91.This section provides for how groups of companies and members of groups are to be treated with regard to tax liabilities. This includes providing how groups of companies are liable through their representative member carrying out taxable activities (see section 18) and how corporate bodies can be considered a group.
92.Subsections (2) to (3) set out the conditions of the application for group treatment. An application for group treatment is made to Revenue Scotland under subsection (4) setting out which of the bodies corporate is to be the representative member. As per subsection (6) a successful application will take effect from the beginning of a particular accounting period. An application to vary or end the group treatment may be made under subsection (7) and, as per subsection (8), may be granted with effect from a time specified by Revenue Scotland in a written notice to the members of the group.
93.Subsection (9) provides that Revenue Scotland only has discretion to refuse an application under subsection (4) or subsection (7) if it appears necessary to do so for the protection of the revenue (i.e. to prevent the loss of tax revenue) – otherwise the application must be granted. However Revenue Scotland has no discretion at all to refuse an application under subsection (7)(b) to exclude a body corporate from group treatments.
94.Subsection (10) states that an application under this section must be made by the bodies or person controlling them and that the application should be made 90 days before the group status is to take effect.
95.Subsection (11) sets out the circumstances in which a corporate body or individuals will be deemed to control another corporate body, mainly if the corporate body is the latter body’s holding company within the meaning of section 1159 and Schedule 6 of the Companies Act 2006 or, in the case of individuals, would be were the individuals a company.
96.This section provides that where bodies corporate are treated as members of a group for the purposes of Scottish aggregates tax, and one of them becomes no longer eligible for group treatment under section 29, that body is under a duty to notify Revenue Scotland immediately of that fact. In addition, this section places a duty on representative members of groups to notify Revenue Scotland before ceasing to have an established place of business in the UK.
97.This section applies where bodies corporate are treated as members of a group for the purposes of Scottish aggregates tax. A body corporate which has made an application under section 29(4) or (7) relating to group treatment, or a notification under section 30(1) or (2) concerning the cessation of its eligibility for group treatment or of its having a place of business in the UK, has a duty to notify Revenue Scotland immediately if any information contained in or provided in connection with that application or notification subsequently becomes inaccurate.
98.This section deals with the scenario where the representative member of a group of bodies corporate ceases to be treated as a member of the group, and no application to change the representative member under section 29(7)(c) has been granted by Revenue Scotland. In such a situation Revenue Scotland is required to substitute a different member of the group as the new representative member by notice to that member.
99.Subsection (3) provides that where a body corporate which is a member of a group ceases to be controlled by any person (see section 29(11)) for the meaning of control in this context) then Revenue Scotland must terminate the group treatment of that body by notice.
100.In addition, subsection (4) provides that if it appears to Revenue Scotland necessary to do so for the protection of the revenue, it has a general power to terminate the group treatment of a body corporate by notice. The time termination comes into effect must not be before the day on which notice is given to the representative member, as per subsection (5).
101.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision applying Part 1 of the Act to cases where a business is carried on in partnership or by an unincorporated body. Regulations under this section will be subject to the negative procedure. Under subsection (2), registration for tax can be in the name of the firm or body concerned (as opposed to being in the name of its members). A body corporate may have several divisions which are themselves bodies corporate: under subsection (4), Revenue Scotland may determine what divisions of a particular corporate body are registrable for Scottish aggregates tax.
102.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision requiring persons who are carrying on the business of someone who has died, become bankrupt or become incapacitated – or whose business is in liquidation, receivership or administration – to inform Revenue Scotland that they are doing so. The regulations may also make provision allowing such persons to be treated as the original taxpayer for the purposes of Scottish aggregates tax; and make provision applying Part 1 of the Act to such persons. These regulations will be subject to the negative procedure.
103.This section of the Act gives a regulation-making power to the Scottish Ministers to make provision applying Part 1 of the Act to cases where a business is transferred to another person as a going concern (that is, it is assumed that the business is still able to meet its financial obligations when they become due). The regulations may include provision requiring notification to Revenue Scotland, and provision treating the transferee as the original taxpayer for the purposes of Scottish aggregates tax. These regulations will be subject to the negative procedure.
104.Sections 36 and 37 of the Act empower Revenue Scotland to issue directions requiring taxpayers (and, in some circumstances, tax representatives) to provide security for the payment of any tax that may become due. Revenue Scotland has the power to specify what type of security is appropriate, but it is expected that a written guarantee from a financial institution (such as a bank) will normally be acceptable.
105.A direction under section 36 made by Revenue Scotland applies to an individual taxpayer or tax representative. A direction under this section may require a taxpayer or tax representative to provide security, or identify the amount of security that a taxpayer would be required to provide to secure the approval of the appointment of a tax representative. In respect of any particular taxpayer, an individual direction under section 36 prevails over a general direction under section 37.
106.A direction under section 37 of the Act made by Revenue Scotland applies to taxpayers generally. It may specify the amount of security, or a method for calculating the amount of security, that persons are required to provide to secure the approval of the appointment of an administrative tax representative. It is expected that a written guarantee from a financial institution (such as a bank) will normally be acceptable. In respect of any particular taxpayer, an individual direction under section 36 prevails over a general direction under section 37.
107.This section amends section 4 of the 2014 Act, allowing Revenue Scotland to delegate its functions relating to Scottish aggregates tax to a person specified in regulations by the Scottish Ministers (subject to the affirmative procedure). A delegation of this kind does not affect Revenue Scotland’s ability to exercise that function or its legal responsibility for it, however (section 4(7)).
108.Under section 4(2), Revenue Scotland may give directions to the relevant person as to how a delegated function is to be exercised and the relevant person has a duty to comply with any such direction by Revenue Scotland. Section 4(2) provides that delegations or directions given under section 4 may be varied or revoked at any time.
109.Under section 4(4)-(5), Revenue Scotland has duties to publish information about delegations and directions given under this section, and to lay before the Scottish Parliament a copy of the information it publishes. However these duties do not apply to the extent that Revenue Scotland considers that publication of the information would prejudice the effective exercise of its functions, as section 4(6).
110.This section amends section 159 of the 2014 Act, applying the penalty there for the failure to make a tax return by the statutory deadline to Scottish aggregates tax. The applicable deadlines are set in regulations under section 22 of the Act. Sections 164 to 167 of the 2014 Act, as amended by this section of the Act, create a sliding scale for the amount of penalty for failure to submit a return for Scottish aggregates tax.
111.This section amends section 168 of the 2014 Act, applying the penalties there for failure to pay tax to Scottish aggregates tax. Subsection (2) of section 168 provides that if a person’s failure to pay tax falls under multiple heads of this provision then the person is liable to a penalty for each separate failure. Sections 170 to 173 of the 2014 Act, as amended by this section of the Act, create a sliding scale for the amount of penalty for failure to pay Scottish aggregates tax.
112.This section amends section 182 of the 2014 Act, applying the penalties there for inaccuracies in taxpayer documents to Scottish aggregates tax: this includes a situation where a taxpayer has amended their tax return under section 83, and claims for repayment under sections 106 to 108. Under section 183 of the 2014 Act, the penalty would be 100% of the potential lost revenue for a deliberate inaccuracy, and 30% of the potential lost revenue for a careless inaccuracy.
113.This section substitutes a new provision into section 209 of the 2014 Act on penalties for failure to register for tax, applying these penalties for failure to comply with the duties imposed by section 18 and 22 of the Act: i.e. the duties relating to registration on persons who carry out taxable activities. Under section 210 of the 2014 Act, the penalty would be 100% of the potential lost revenue for a deliberate failure to comply, and 30% of the potential lost revenue for a careless failure to comply.
114.This section inserts a new Chapter 5A into Part 8 of the 2014 Act, creating a new penalty (section 216A) for a failure to notify Revenue Scotland of the production of exempt aggregate under section 20 of the Act. This would be a flat rate penalty of £1,000.
115.This section inserts a new section 216B into the 2014 Act, creating a penalty for a failure to keep or preserve records or documents as required under regulations made under section 18(5) of this Act. This would be a flat rate penalty of £1,000.
116.This section inserts a new section 216C into the 2014 Act, creating a penalty in relation to Scottish aggregates tax where a person has failed to seek Revenue Scotland’s approval to appoint a tax representative where required to do so in regulations made under section 26(1) of the Act. This would be a flat rate penalty of £10,000. A defence of reasonable excuse is available, however, as set out in inserted section 216C(3).
117.This section inserts a new section 216D into the 2014 Act, creating a penalty in relation to Scottish aggregates tax where a person who fails to notify Revenue Scotland, that the person has ceased to be eligible to be treated as part of a group of corporate bodies, as is required under section 30(1) of the Act. This would be a flat rate penalty of £500.
118.This section inserts a new section 216E into the 2014 Act, creating a penalty in relation to Scottish aggregates tax where a person fails to comply with section 31 of this Act, requiring notification to Revenue Scotland of any changes to group treatment applications or notifications. This would be a flat rate penalty of £250.
119.This section inserts a new section 216F into the 2014 Act, creating a new penalty for a failure to provide security for payment of Scottish aggregates tax when required to do so by Revenue Scotland under section 36 or 37 of the Act. This would be a flat rate penalty of £20,000.
120.This section inserts a new section 216G into the 2014 Act, providing that liability under the penalty provisions relating to Scottish aggregates tax, as inserted by this Chapter of Part 1 of the Act, will not arise where the taxpayer can show that there is a reasonable excuse for their conduct; section 216G(2) makes further provision on what can and what cannot be claimed as a reasonable excuse for these purposes.
121.In addition, this section inserts a new section 216H into the 2014 Act, making provision about the assessment and payment of penalties under the penalty provisions relating to Scottish aggregates tax. Revenue Scotland is required to assess the penalty and notify the person who is liable and there is then a period of 30 days for payment. The assessment must be made by Revenue Scotland within 12 months of either the person becoming liable to the penalty or Revenue Scotland becoming aware of the person’s liability (whichever is later), and is treated as an assessment to tax for enforcement purposes.
122.This section of the Act also inserts a new section 216I into the 2014 Act, giving the Scottish Ministers a regulation-making power to make changes to the new penalty provisions in Chapter 5A of Part 8 of the 2014 Act, as inserted by this Act. This is consistent with other powers in Part 8. The regulations will be subject to the affirmative procedure.
123.This section amends section 233 of the 2014 Act, setting out which decisions of Revenue Scotland in relation to Scottish Aggregates Tax are “appealable” under Part 11 of the 2014 Act, and therefore are subject both to review by Revenue Scotland on request under section 234, and appeal to the First-Tier Tribunal under section 241.
124.This section sets out the meaning of all the defined terms used in Part 1 of the Act. This includes, in subsections (2) to (5), specific definitions of references in the Act to the use of anything for construction purposes; references to winning aggregate; references to tax due from any person in relation to an accounting period; and references to a person being resident in the UK.
125.This section amends reference to this Act into the interpretation provisions of the 2014 Act.
