Part 3

Introduction and administration of the levy

Process

Scheme to impose levy
12
1
A local authority may—
a
introduce a scheme or schemes to impose the levy for all or part of its area (referred to in this Act as a “VL scheme”),
b
modify a VL scheme, or
c
revoke a VL scheme.
2
A VL scheme may make different provision for different purposes or different areas within the local authority's area.
3
Two or more local authorities may act jointly to make a VL scheme.
4
In those circumstances—
a
they must continue to act jointly in relation to the scheme in all respects, and
b
unless the context requires otherwise, a reference in this Act to—
i
a local authority, in relation to a VL scheme or to a proposed scheme, is a reference to the authorities acting jointly,
ii
the area of a local authority is a reference to the combined areas of those authorities, and
iii
the local tourism strategy of a local authority is a reference to any tourism strategy prepared by an authority which is in effect in all or part of the area to which the VL scheme applies.

Prior consultation on scheme
13
1
Before introducing or modifying a VL scheme, a local authority must—
a
prepare and publicise—
i
an outline of the proposed scheme or (as the case may be) the scheme as it is proposed to be modified (“the proposal”),
ii
a statement about the cases and circumstances under the proposal in which the levy (or a sum equivalent to the levy) is not payable or may be reimbursed,
iii
a statement about the objectives of the proposal, including how the authority intends to measure and report on the achievement of those objectives, and
iv
an assessment of the impacts of the proposal in the authority’s area,
b
consult—
i
such persons as the authority considers to be representative of communities, businesses engaged in tourism and tourist organisations in its area,
ii
in the case of a modification of a VL scheme, the VL forum for that scheme as established by the local authority in accordance with section 16(1),
iii
if any part of the area to which the VL scheme relates has been designated as a National Park, the National Park authority for that Park, and
iv
such other persons as the authority considers likely to be affected by the proposal,
c
prepare and publicise a report which—
i
summarises the consultation responses received,
ii
states whether or not the authority intends to proceed with the proposal (or the proposal as modified in light of the consultation), and
iii
sets out the authority's reasons for whether or not it intends to proceed.
2
For the purposes of subsection (1)(a)(iii) the objectives must relate to developing, supporting or sustaining facilities or services which are substantially for or used by persons visiting the scheme area for leisure or business purposes (or both).
3
For the purposes of subsection (1)(a)(iv) the assessment must, in particular, set out what the local authority considers to be the likely effects of the proposal on—
a
persons living within the scheme area, and
b
such other persons as the authority considers likely to be affected by the proposal.
4
Before revoking a VL scheme, a local authority must publicise the proposed revocation of the scheme.

Required content of a scheme
14
1
A VL scheme must specify—
a
the scheme area,
b
the date on which the scheme is to come into force,
c
the scheme period (that is, the period during which the scheme is to remain in force (which may be indefinitely)),
d
when during the scheme period a purchase of the right to reside in or at overnight accommodation is to give rise to the levy (which may be at all times during the scheme period),
e
the percentage rate (or rates) of the levy set by the local authority under section 6,
f
the scheme’s objectives,
g
arrangements for the review of decisions by the authority in relation to the scheme,
h
the cases or circumstances in which the levy (or a sum equivalent to the levy) is not payable or may be reimbursed,
i
that the levy (or a sum equivalent to the levy) is not payable or is to be reimbursed in a case where the visitor or any other person utilising the right to reside in the overnight accommodation is in receipt of benefits, payments or allowances for a disability—
i
under section 71 of the Social Security Contributions and Benefits Act 1992 (disability living allowance),
ii
specifically for working age people given in accordance with regulations made under section 31 of the Social Security (Scotland) Act 2018 (disability assistance),
iii
under section 64 of the Social Security Contributions and Benefits Act 1992 (attendance allowance),
iv
specifically for older people given in accordance with regulations made under section 31 of the Social Security (Scotland) Act 2018 (pension age disability benefit), or
v
under Part 4 of the Welfare Reform Act 2012 (personal independence payment),
j
arrangements for the administration of the exemption or reimbursement specified in accordance with paragraph (i), including the evidence required and manner in which it may be demonstrated that a visitor or other person is in receipt of the relevant benefit, payment or allowance,
k
arrangements for the reimbursement of the levy (or a sum equivalent to the levy) to a visitor who has (or a category of visitors who have) entered into a chargeable transaction, and
l
the manner in which the authority intends to make decisions on the use of the net proceeds of the scheme.
2
For the purposes of subsection (1)(h), the VL scheme must specify whether the levy is not payable in relation to accommodation which has an annual turnover below the VAT threshold.
3
The date on which a VL scheme is to come into force, or on which a significant modification is to take effect, must be at least 18 months after the date on which the local authority publishes a report under section 13(1)(c) stating that it intends to proceed with the original or modified proposal.
4
In subsection (3), “significant modification” means a modification of a VL scheme which—
a
expands the scheme area,
b
increases the percentage rate (or rates) of the levy, or
c
removes from the VL scheme any cases or circumstances in which the levy (or a sum equivalent to the levy) is not payable or reimbursed.
5
Any other modification of a VL scheme may come into force on a date specified after the authority publishes a report under section 13(1)(c) stating that it intends to proceed with the original or modified proposal.
6
The Scottish Ministers may by regulations amend subsection (1) so as to—
a
add something that a VL scheme must specify, or
b
remove, or vary the description of, any of the required content of a VL scheme listed in subsection (1) (except subsection (1)(e)).
7
The Scottish Ministers may by regulations amend subsection (4) so as to add to, remove, or vary the description of the modifications listed.
8
Before making regulations under this section, the Scottish Ministers must consult—
a
local authorities,
b
such persons as they consider to be representative of communities, businesses engaged in tourism and tourist organisations, and
c
such other persons as they consider appropriate.
9
Regulations under this section are subject to the affirmative procedure.
10
In this section, “the VAT threshold” means the amount for the time being specified in paragraph 1(1)(a) of schedule 1 of the Value Added Tax Act 1994.

Publicity for introduction of scheme
15
1
As soon as reasonably practicable after the date of its decision to introduce a VL scheme, the local authority must—
a
notify the Scottish Ministers of its decision to introduce a VL scheme, and
b
publicise—
i
its decision to introduce a VL scheme, and
ii
the proposed date on which the VL scheme is to come into force.
2
The Scottish Ministers may by regulations make further provision about how local authorities must publicise the matters mentioned in subsection (1)(b).
3
Regulations under subsection (2) are subject to the negative procedure.

Visitor levy forum
16
1
A local authority operating a VL scheme must—
a
by no later than 6 months after the date of its decision to introduce a VL scheme, establish a forum for the scheme (“the VL forum”) to carry out the functions set out in subsection (2),
b
maintain the VL forum for the duration of the scheme, and
c
ensure that the VL forum—
i
is able to carry out those functions, and
ii
meets on a regular basis, being not less than 2 times in each calendar year.
2
The functions of the VL forum are—
a
to discuss and advise the authority and any other person or body consulting the forum on matters having to do with the VL scheme,
b
to discuss and respond to each—
i
consultation on a modification of the VL scheme under section 13(1)(b), and
ii
consultation on the use of net proceeds of the VL scheme under section 19(2), and
c
to discuss and make such representations as are considered appropriate in relation to each—
i
annual report on the VL scheme under section 20, and
ii
report setting out the findings of a review of the VL scheme under section 21.
3
The VL forum is to consist of such persons as are appointed to it by the local authority operating the VL scheme.
4
The local authority must ensure that the membership of the VL forum—
a
includes such persons as the authority considers to be representative of communities, businesses engaged in tourism and tourist organisations in its area, and
b
consists of a reasonable balance of such persons.
5
The local authority may appoint one or more of its own members to the VL forum, provided that local authority members do not form a majority of the members of the VL forum.
6
If there is more than one VL scheme for different parts of a local authority area—
a
more than one VL forum may be established for the area of a local authority, but
b
a single VL forum may be established for the purposes of this section and the schemes in the different parts of a local authority area.

Transitional provision
17
1
The levy must not be charged in respect of a chargeable transaction that is paid for (in full or part) before the date of the local authority's decision to introduce a VL scheme.
2
The levy may be charged in respect of a chargeable transaction that is paid for (in full or in part) after the date of the local authority's decision to introduce a VL scheme but before the date on which the VL scheme comes into force, if the visitor takes entry to the accommodation that the transaction relates to after the date on which the scheme comes into force.

Finances

Duty to keep separate account for scheme
18
1
A local authority operating a VL scheme must keep an account for the scheme.
2
The authority must, for each financial year—
a
credit the account with the amount of money received under the VL scheme (including any money received from penalties), and
b
debit the account with the expenses of operating the scheme.
3
The Scottish Ministers may by regulations make provision for or about the keeping of accounts by local authorities in connection with their functions under this Act.
4
Regulations under subsection (3) may, in particular—
a
specify the form of accounts,
b
require the publication of a statement of account, and specify the manner in which it must be published,
c
make provision about what may or must be done jointly where a VL scheme is made jointly.
5
Regulations under subsection (3) are subject to the negative procedure.

Use of net proceeds of scheme
19
1
A local authority operating a VL scheme must use the net proceeds of the scheme (or, in the case of a joint scheme, the authority's share of the net proceeds) for the purposes of—
a
facilitating the achievement of the scheme’s objectives (as set out in the statement publicised by the authority under section 13(1)(a)(iii)), and
b
so far as not needed for the achievement of the scheme’s objectives, otherwise developing, supporting and sustaining facilities and services which are substantially for or used by persons visiting—
i
the area of the local authority, or
ii
in the case of a joint scheme, the area of the local authority or the area of a local authority with whom the authority is acting jointly,
for leisure or business purposes (or both).
2
In using the net proceeds of the VL scheme, a local authority must—
a
from time to time, consult—
i
such persons as the authority considers to be representative of communities, businesses engaged in tourism and tourist organisations in its area,
ii
the VL forum for that scheme as established by the local authority in accordance with section 16(1),
iii
if any part of the area to which the VL scheme relates has been designated as a National Park, the National Park authority for that Park,
iv
such other persons as the authority considers appropriate,
b
have regard to its local tourism strategy (if any), and
c
if any part of the area to which the VL scheme relates has been designated as a National Park, have regard to the National Park Plan for that Park as adopted under section 12(7)(a) of the National Parks (Scotland) Act 2000.
3
Before using any share of net proceeds under subsection (1)(b)(ii) in respect of a facility or service outside its own area, the authority must also be satisfied that doing so will benefit some part of its own area.
4
In this section, “net proceeds” means the amount of money (if any) by which the gross amount received under the VL scheme for a financial year exceeds the expenses of operating the scheme for the financial year.

Performance

Annual reporting on scheme
20
1
A local authority operating a VL scheme must prepare a report on the scheme in respect of each reporting period, including information on—
a
the amount of money collected under the scheme,
b
how the net proceeds of the scheme have been used, and
c
the performance of the scheme by reference to its objectives (as set out in the statement publicised by the authority under section 13(1)(a)(iii)).
2
A local authority must publish the report—
a
as soon as reasonably practicable after the end of the reporting period, and
b
in such manner as it considers appropriate.
3
The local authority must provide a copy of the published report to the VL forum for that scheme established by the local authority in accordance with section 16(1).
4
The Scottish Ministers may by regulations make further provision about the content of reports under this section.
5
Regulations under subsection (4) are subject to the negative procedure.
6
In this section—
- “net proceeds” has the same meaning as in section 19,
- “reporting period” means—
  1. in the case of the first report, any period determined by the local authority of a maximum of 18 months beginning with the date on which the scheme came into force,
  2. in any other case, the period of 12 months beginning with the date on which the previous reporting period ended.

Review of scheme
21
1
A local authority operating a VL scheme must review the scheme—
a
before the end of the period of 3 years beginning with the date on which the scheme came into force, and
b
before the end of each subsequent period of 3 years.
2
The local authority must, as soon as reasonably practicable after carrying out such a review, publish a report setting out its findings.
3
The local authority must provide a copy of the published report to the VL forum for that scheme established by the local authority in accordance with section 16(1).

Scottish Ministers’ power to regulate process
22
1
The Scottish Ministers may by regulations make further provision about, or in connection with, the process to be followed by a local authority when introducing, administering, reporting on or reviewing a VL scheme.
2
Regulations under this section are subject to the affirmative procedure.

Guidance on visitor levy scheme
23
1
A local authority must, when exercising a function under Part 3 of this Act, have regard to any guidance published under this section.
2
VisitScotland must—
a
prepare and publish guidance for local authorities about the operation of Part 3 of this Act, and
b
from time to time review the guidance published under this section and, if it considers it appropriate, publish updated guidance.
3
Guidance published under this section must in particular include guidance about—
a
other persons whom a local authority might consider to be affected or appropriate when the authority consults on a VL scheme under section 13(1)(b) or on the net proceeds of a VL scheme under section 19(2),
b
the process which a local authority might follow before determining any cases and circumstances in which the levy is not payable or reimbursed,
c
support or assistance which a local authority may provide to liable persons to operate in accordance with a VL scheme,
d
the matters to be considered by a local authority when deciding the objectives of a scheme, and
e
the matters to be considered by a local authority when deciding the use of the net proceeds of a scheme.
4
Before publishing guidance (or updated guidance) under this section, VisitScotland must send a draft of the guidance to the Scottish Ministers for approval.
5
The Scottish Ministers may—
a
approve draft guidance submitted to them under subsection (4),
b
reject the draft guidance, or
c
require VisitScotland to modify the guidance in such manner as the Scottish Ministers may specify.
6
The Scottish Ministers may by regulations modify this section so as to—
a
substitute a different body for the one which is for the time being subject to the duties in subsections (2) and (4),
b
make more than one body responsible for preparing and publishing or reviewing the guidance, or
c
add to, remove, or vary the description of the matters listed in subsection (3) which must be included in the guidance.
7
If regulations under subsection (6) substitute the Scottish Ministers as the body responsible for publishing the whole or part of guidance, the requirements in subsections (4) and (5) do not apply to the duties of the Scottish Ministers.
8
Regulations under subsection (6) are subject to the affirmative procedure.
S. 12 not in force at Royal Assent, see s. 79(2)
S. 13 not in force at Royal Assent, see s. 79(2)
S. 14 not in force at Royal Assent, see s. 79(2)
S. 15 not in force at Royal Assent, see s. 79(2)
S. 16 not in force at Royal Assent, see s. 79(2)
S. 17 not in force at Royal Assent, see s. 79(2)
S. 18 not in force at Royal Assent, see s. 79(2)
S. 19 not in force at Royal Assent, see s. 79(2)
S. 20 not in force at Royal Assent, see s. 79(2)
S. 21 not in force at Royal Assent, see s. 79(2)
S. 22 not in force at Royal Assent, see s. 79(2)
S. 23 not in force at Royal Assent, see s. 79(2)
S. 12 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 13 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 14 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 15 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 16 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 17 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 18 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 19 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 20 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 21 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 22 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2
S. 23 in force at 20.9.2024 by S.S.I. 2024/231, reg. 2