Appendix 1 – Guidance on the Visitor Levy for local authorities (Scottish Government – October 2024)
Perth and Kinross Council · 5 February 2025
Back to Economy and Infrastructure Committee — 5 February 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Guidance on the Visitor Levy for local authorities October 2024
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Contents Minister’s Foreword 3 Foreword from VisitScotland 4 01 Power to Introduce a Levy 6 02 Timeline 8 03 Required Content of a Visitor Levy Scheme 11 04 Forecasting 13 05 Early Engagement 16 06 Consultation 21 07 Implementation Period 25 08 Equalities 27 09 Scheme Publication 29 10 Calculation of a Levy 31 11 Rate Setting 38 12 Use of Funds 41 13 Liable Persons 46 14 Assistance for Liable Persons 49 15 Billing of Overnight Accommodation 51 16 Remittance 53 17 Exemptions 58 18 Islands 63 19 Local Flexibilities 65 20 Communication 67 21 Visitor Levy Forum 70 22 Accounting 72 23 Annual Reporting 74 24 Review of a Visitor Levy Scheme 76 25 Compliance 78 26 Internal Review and Appeal 82 27 Registers 84 Images : Front cover, Helix Home of the Kelpies Contents page, John Muir Way, Helensburgh
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Guidance on the Visitor Levy for local authorities 3 Minister’s Foreword The Scottish Government believes that a visitor levy can be a force for good, delivering benefits for local communities, local authorities, and local businesses. For the first time councils in Scotland now have the power to introduce a visitor levy in their area, if they think it is right and after they have consulted local businesses, communities, and tourism organisations. Alongside the process of Parliamentary scrutiny of the Visitor Levy (Scotland) Act the Scottish Government asked VisitScotland to form an Expert Group, made up of stakeholders reflecting tourism, business, and local government. The purpose of the Group was to develop guidance for local authorities on the use of the new visitor levy power. The Act was amended as it progressed through Parliament to legally require all local authorities to have regard to this Guidance. I therefore welcome this first published edition of the Guidance, and am pleased to formally approve it, in line with the requirements under the Act. It is the fruit of much work by VisitScotland and the Expert Group, considering a large number of issues and producing Guidance that will be useful to not only local authorities, but others with an interest in how best to introduce and administer a visitor levy. I thank all those organisations on the Expert Group who gave their time and expertise to produce this Guidance. The power to introduce a visitor levy is a new and important one for local authorities, and this Guidance will assist them in considering, and if they believe it is right, introducing and administering a visitor levy in the most effective way possible. Ivan McKee MSP Minister for Public Finance
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Guidance on the Visitor Levy for local authorities 4 Foreword from VisitScotland As the national tourism agency, VisitScotland’s core purpose is to drive the visitor economy and grow its value to Scotland. We do this in collaboration with the tourism and events industry as we work together to deliver the two national strategies - Scotland Outlook 2030 and Scotland the Perfect Stage. Together, these set out our shared ambitions for Scotland to be the world leader in 21st century tourism and build on our status as a world-leading events destination. The introduction of a visitor levy in Scotland – in line with many other destinations around the world – adds a new and important dimension to these ambitions. The visitor economy is one of Scotland’s most important industries, supporting businesses, jobs and communities across the country. It is one of six Scottish Government growth sectors and is worth £10.7 billion (c.6%) to Scotland’s economy. With a levy, local authorities now have the power to generate revenue specifically for the benefit of the visitor economy. If developed collaboratively between local authorities and businesses, a visitor levy scheme represents a unique and significant opportunity to deliver multi-million-pound annual investment in the sector. Given that critical link to the visitor economy, we expect that local authorities choosing to bring forward proposals will do so after having set out their priorities for development of the sector through local tourism or visitor economy strategies. This approach will ensure that the objectives of a visitor levy brought forward align with the principles of relevant local tourism strategies, as well as other related local, regional and national strategies directly linked to the visitor economy. We know the introduction of a levy is a major change for businesses and we expect local authorities to work closely with the accommodation sector in their area. It is important businesses receive the support they need to be able to collect and remit the levy where it will be charged. The implementation period will be the ideal opportunity to do this but we welcome the opportunities the legislation provides for regular engagement with the sector beyond the introduction of a levy. As chair of the Expert Group, we have brought together the tourism industry, local authorities and government to deliver the statutory guidance for the visitor levy. This document provides local authorities with guidance on the development and implementation of a visitor levy. It may also be of use to accommodation providers responsible for collecting and remitting a levy, and others with an interest in a proposed scheme. We will continue to consider and review the guidance as local authorities bring forward proposals for visitor levy schemes and to reflect the complexities of certain accommodation sectors. This will be done through continued collaboration with the industry and local authorities as we work to ensure that the introduction of any visitor levy helps destinations deliver on their ambitions for sustainable tourism.
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01 Power to Introduce a Levy V&A Dundee and RRS Discovery
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Guidance on the Visitor Levy for local authorities 6 01 Power to Introduce a Levy 1. The Visitor Levy (Scotland) Act 2024 (referred to hereafter as “the Act”), was passed by the Scottish Parliament in May 2024, and received Royal Assent on 5th July 2024. The Act gives local authorities in Scotland the power to introduce a levy that is charged on the purchase of overnight accommodation at a percentage rate. It will be for each local authority to decide after consultation, whether or not to introduce a visitor levy (VL) scheme. 2. A local authority will also determine many of the elements of a VL scheme, such as the percentage rate set, the geographical area where it applies, and local exemptions from paying a visitor levy. 3. This guidance is for local authorities that are considering developing and implementing a VL scheme in their area. It may also be of use to accommodation providers responsible for collecting and remitting a levy, and others with an interest in a proposed VL scheme. The guidance has been developed collaboratively between local authorities and tourism and accommodation business organisations, working together in an Expert Group led by VisitScotland. 4. This guidance is not intended to be exhaustive, nor is it an authoritative statement of the law. Local authorities should seek their own legal advice if, and where, they are unsure of their legal obligations or the lawfulness of a proposed VL scheme. This guidance may be reviewed and updated from time to time. Types of accommodation to which a levy applies 5. Under the Act, overnight accommodation is considered a room or area that is used by a visitor for residential purposes, but is not their only or usual place of residence. Therefore a visitor levy does not apply to accommodation that is being used as someone’s only or usual place of residence. 6. The types of accommodation included within scope of the legislation are: a. hotels b. hostels c. guest houses d. bed and breakfast e. self-catering f. camping sites g. caravan parks h. accommodation in a vehicle, or on board a vessel, which is permanently or predominantly situated in one place i. any other place at which a room or area is offered by the occupier for residential purposes otherwise than as a visitor’s only or usual place of residence 7. A visitor levy cannot be charged for accommodation on local authority gypsy and traveller sites, and registered social landlord gypsy and traveller sites. It also cannot be charged for accommodation in a vehicle, or on board a vessel that is undertaking a journey involving one or more overnight stops. 8. Scottish Ministers may amend the Act to change the type of accommodation covered, vary the description of the accommodation type, or remove a type of accommodation. Before making any of these changes, Scottish Ministers must consult local authorities, representatives of communities, businesses engaged in tourism and tourist organisations, and other appropriate persons. Where Scottish Ministers seek to change accommodation types, this would need to be approved by the Scottish Parliament.
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02 Timeline The Old Man of Storr, Isle of Skye
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02 Timeline 1. Many of the activities required to be carried out by local authorities as part of the introduction, implementation, or modification of a VL scheme will need to be carried out in a specific order. 2. Beyond these statutory requirements, it is recommended that local authorities also carry out a range of other tasks, which although non-statutory, will ensure that a VL scheme is introduced in a manner which the Expert Group considers good practice. Figure 1 and Table 1 outline both the statutory and non-statutory tasks and provide an indicative timeline presenting the order in which events and activities should take place during the introduction of a VL scheme. 3. This timeline is intended to provide a general guide, and exact dates that activity is undertaken will be for the local authority to determine according to individual local circumstances. 4. It is also recommended that, where possible, local authorities consider how existing approaches can be utilised in the completion of these activities. Figure 1: Indicative timeline of activities to be carried out establishing a VL scheme Guidance on the Visitor Levy for local authorities 8 Forecasting Approximately 6 -12 months Approximately 2 years Normally 12 weeks At least 18 months VL Scheme comes into force Early Engagement Consultation Implementation
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Guidance on the Visitor Levy for local authorities 9 Table 1: Indicative timeline of activities to be carried out establishing a VL scheme Statutory Requirement Local authorities undertake work to understand their local visitor accommodation sector and set up necessary cross working between local authority departments. See Chapter 04 Forecasting. Local authorities engage with stakeholders to develop visitor levy proposal, which may include considerations such as exemptions and their potential impact. See Chapter 05 Early Engagement. Discussion at committees within the local authority. Debate at relevant local authority committee. Local authorities to prepare for consultation. See Chapter 06 Consultation. Objectives of VL scheme to be developed. ✓ Impact studies to be carried out as required. ✓ Develop draft VL scheme to be proposed. Plans for the use of net proceeds of a VL scheme to be developed. See Chapter 12 Use of Funds. Agreement of draft VL scheme by the local authority. Public consultation on entire draft VL scheme proposal (standard practice is 12 weeks). See Chapter 06 Consultation ✓ Analyse and report findings to the local authority committee, including potential changes to a VL scheme in light of consultation. See Chapter 06 Consultation. Formal public announcement of decision on whether or not to introduce a VL scheme (if the decision is to introduce a VL scheme, the proposed start date for a scheme is to be set out). ✓ Minimum 18-month implementation period begins. See Chapter 07 Implementation Period. ✓ Scottish Ministers to be notified of decision to introduce Levy. ✓ Local authorities to establish a Visitor Levy Forum within six months of formal public announcement of a decision to introduce a VL scheme. See Chapter 21 Visitor Levy Forum. ✓ Local authorities to advise businesses of their liability and prepare administration of VL scheme. Implementation period expires. VL scheme comes into force, and the visitor levy is collected and remitted to the local authority. See Chapter 16 Remittance. ✓ Annual report on the scheme. See Chapter 23 Annual Reporting ✓
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03 Required Content of a Visitor Levy Scheme Inner Forth Cycle Route
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03 Required Content of a Visitor Levy Scheme 1. Local authorities wishing to introduce a visitor levy in their area are required to create a VL scheme. A VL scheme is required by the Act to specify: a. the geographical area covered by a VL scheme (two or more local authorities may act jointly to make a VL scheme) b. the date on which a VL scheme comes into force c. the period of time in which a VL scheme will be active (which can be indefinitely) d. the times during a VL scheme period when the purchase of accommodation will be liable to a visitor levy charge (which can be at all times) e. the percentage rate of the visitor levy f. the scheme’s objectives g. the arrangements for review of decisions that relate to a scheme h. any exemptions that mean a visitor levy is not payable or may be reimbursed (which must include an exemption where the visitor is in receipt of disability benefits specified in the Act) i. the arrangements for the administration of any exemptions j. the evidence required and manner in which it can be proved that the exemption related to specified disability benefits applies to a relevant transaction k. the way the local authority intends to make decisions on the use of the net proceeds from a visitor levy l. whether or not the visitor levy is payable in relation to accommodation with an annual turnover below the VAT threshold Guidance on the Visitor Levy for local authorities 11
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04 Forecasting Edinburgh Fringe Festival performers
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Guidance on the Visitor Levy for local authorities 13 04 Forecasting 1. The forecasting of revenue from a visitor levy is an important process to help understand the viability of introducing a visitor levy. Being able to estimate the size of the expected receipts from specific accommodation providers, through establishing an early register of accommodation businesses, may also assist compliance once the VL scheme is operational. 2. Forecast estimates will be impacted by choices on the design of a scheme, including what exemptions are put in place, the geographical area it applies to and the percentage rate of the charge. Revenue forecasting 3. There are different approaches to forecasting future revenue receipts, and a variety of different secondary data sources that can help with such forecasting are available for free or on paid subscription. Quality of information is likely to be variable, and estimates should acknowledge the levels of uncertainty or gaps in coverage, so reasonable expectations are set. 4. To calculate the expected forecasted revenue, a variety of data could be used to help with this work. For example, local authorities may wish to prepare data on the supply of inventory (rooms, keys, beds) the number of places to stay in the area (properties), the times through the year these are occupied (occupancy rates), and average tariffs for different accommodation types. Local authorities may also find it helpful to use publicly available data relating to Non-Domestic Rates to identify the number of each accommodation type included in the scope of the VL scheme. 5. In very simple terms, Table 2 is an example of what a local authority could develop as a basis for any initial estimation. Table 2: An example of what a local authority could develop as a basis for initial forecasting Accommodation type1 Number of rooms Occupancy rate Average cost per room Revenue from 1% of occupied room cost Current hotel provision 6,414 66.7% £65.38 £1.02m New hotels or expansions currently under construction 325 66.7% £65.38 £51,730 Guest houses / B&B 210 39.0% £55.00 £16,441 Camping (berths) 40 25.0% £25.00 £912 Youth hostels (beds) 50 45.0% £16.50 £1,355 Self-catering / short term lets 525 47.0% £50.00 £45,031 Total 7,564 £1.135m 1When forecasting the room rates used, it will need to be net of additional extras (e.g. food), include whether accommodation is available 365 days a year or seasonal, and include the impact of exemptions.
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Guidance on the Visitor Levy for local authorities 14 6. Where local data is difficult to come by, local authorities may wish to seek national level information from sources such as VisitScotland. Forecasting ongoing costs of administration 7. Under the Act, the administrative costs to a local authority of a VL scheme can be taken from the funds raised by a scheme. 8. The local authority could base these costs on their experience of administering other local taxes, including enforcement activity, or from engagement with other municipalities in Europe with direct experience of administrating these types of taxes. 9. Local authorities must annually report a VL scheme income from the period, the quantity spend, and the quantity used to support the administration of the visitor levy. For further information, see Chapter 22 Accounting. Delegation of enforcement and collection 10. The Act enables a local authority to delegate collection and enforcement functions. This allows it to put in place arrangements with a third party to handle these aspects in relation to a VL scheme. 11. A local authority could, therefore, perform the various collection and enforcement functions itself or make arrangements with another body (e.g. an administrative and professional services company) to carry out the administration of a visitor levy. Under the Act, a local authority can enter into an agreement with another local authority to carry out these functions, as is currently the practice for some elements of existing local taxes. 12. Such collection activity might involve the processing of a combination of business data and personal data (in the context of a business), which will be in scope of the UK General Data Protection Regulation (GDPR). When contracting for such a service, the local authority will need to make sure that the contract is compliant with UK GDPR Article 28 (processor) and that each processor involved will support the local authority in upholding data subject rights. Costs for local authorities setting up a VL scheme 13. The up-front set-up and decision-making costs may need to be financed within existing local authority budgets; however, it should be borne in mind that these costs could be offset against future revenues raised through a VL scheme. It will be up to the local authority to decide how best this can be carried out.
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05 Early Engagement Sands of Meal, Shetland©Euan Myles
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05 Early Engagement 1. Local authorities considering introducing a VL scheme in their area are strongly recommended to undertake engagement around proposals for a scheme, prior to the consultation. Although not statutory, this is considered, by the Expert Group, to be best practice. To assist with planning this engagement an example is given on page 19 outlining the approach the City of Edinburgh Council has taken. 2. This approach will enable local authorities to bring forward proposals that are well understood by those who will be paying, collecting and remitting the levy. It will also be a collaborative way to help generate industry support for a VL scheme. 3. Local authorities will have their own well-established processes and networks for engaging with stakeholders. Local authorities should make use of these networks and processes, engaging through them to develop proposals in advance of the consultation. 4. The following chapter of the guidance outlines some key principles that local authorities should consider when commencing early engagement. Context 5. When developing approaches to early engagement, local authorities should first have an understanding of what is needed to bring forward a consultation. For the consultation the Act requires a local authority to prepare: a. an outline of a proposed VL scheme b. a statement about the objectives of the proposal, indicating how the authority intends to measure and report on those objectives c. an assessment of the impacts of the proposal d. a statement about the cases or circumstances where a visitor levy will not be payable or may be reimbursed 6. In order to establish this information, the local authority proposing a VL scheme will need to undertake a level of engagement, with relevant stakeholders, deemed appropriate to inform the consultation process. General principles 7. The following ‘general principles’ will help guide local authorities focus early engagement to inform preparation for the required consultation. In particular these three areas are considered: a. a scheme outline b. scheme objectives c. scheme impact Guidance on the Visitor Levy for local authorities 16
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Guidance on the Visitor Levy for local authorities 17 Scheme outline 8. Local authority priorities: in developing an outline for a VL scheme, a local authority should identify its own priorities for its development and delivery. A local authority must have regard to, and align with, the principles of relevant local tourism strategies, as well as other related local, regional and national strategies, which are directly linked to the visitor economy. This should be considered before moving any further. The local authority should also take necessary steps to ensure all relevant individuals / departments within the local authority are sighted on early development of a VL scheme outline. 9. Local stakeholders: in developing an outline for a VL scheme, a local authority should identify and engage with stakeholders who will have an interest in such a scheme. This interest can be a: a. business interest (they will be collecting and remitting the levy) b. resident interest (they may wish to know how the funds will be spent) c. tourism organisation interests (local and national tourism organisations with an interest in how the visitor levy will operate and funds be used, such as VisitScotland) d. other public body interests (such as national parks who will have an interest in a potential VL scheme) e. visitor interests f. or other interest (such as organisations who may be able to provide advice and support on the collection of a self-assessed levy, e.g. Revenue Scotland) Identifying the right stakeholders for this process will be easier if these stakeholders have been engaged through the existing tourism strategy process. Local authorities will have long-established networks and processes which they should be able to rely on when identifying stakeholders. 10. Engagement: once stakeholders have been identified, local authorities should make efforts to engage them in understanding their priorities. Simultaneously, local authorities should take this opportunity to test early thinking with these stakeholders. 11. Scheme development: having done this early work, a local authority should be in a position to develop a scheme outline that is familiar to key stakeholders, is cognisant of their views, reflects the aspirations of the local tourism strategy, and other related local, regional and national strategies, which are directly linked to the visitor economy.
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Guidance on the Visitor Levy for local authorities 18 Scheme objectives 12. Tourism strategy: in developing an outline for a VL scheme, a local authority should be able to draw a clear link to the objectives of its local tourism strategy and other related local, regional and national strategies. Having the objectives of the levy closely linked to this will allow the local authority to ensure that the VL scheme objectives link to wider strategic thinking on the visitor economy. 13. Local authority priorities: local authorities should consider the priorities for their own areas and ensure that the stakeholders they engage with during early engagement, understand these priorities, so that a VL scheme’s objectives link to the wider work, and strategic focus of the local authority. Scheme impacts 14. Assessment: local authorities are required to assess the impacts of their proposal as part of the consultation. In order to inform this process, we recommend that local authorities undertake work to identify impacts on: a. businesses collecting and remitting the levy b. visitors paying the levy c. communities who may benefit from the levy d. local authorities administering the levy 15. Work to assess the impact of a proposed VL scheme should be undertaken openly and transparently, working with stakeholders appropriately. For more information, see Chapter 18 Islands and Chapter 08 Equalities. 16. Local authorities should engage with liable persons to develop awareness of the costs that will be incurred by a liable person collecting and remitting a levy at this stage of the process. Local authorities may wish to consider engaging with liable persons around possible options for addressing those costs, which could then be included as part of the statutory consultation process. 17. Work will also be required to assess the potential income generated at an early stage. For further information, see Chapter 04 Forecasting. 18. The following case study example may aid local authorities as they look to develop their early engagement approach.
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Guidance on the Visitor Levy for local authorities 19 City of Edinburgh Council Early Engagement Over a significant period of time, City of Edinburgh Council has conducted engagement focusing on the below elements, which subsequently play a crucial role in shaping the development of their VL scheme: • understanding the powers given by the new legislation - what choices a local authority can make, and the sequence of stages they need to follow • access and knowledge of local data – to estimate the expected revenue receipts, as well as understand the range and diversity of the accommodation base in the area • engage out – utilising existing networks to facilitate regular and frequent engagement with the sectors that will be impacted. For example, Edinburgh Strategic Implementation Group, Edinburgh Tourism Action Group, other business networks, businesses, visitors, community councils and residents. This also included a visitor levy survey aimed at visitors and residents, generating almost 4,000 responses • engage in – identify the internal workstreams to implement the visitor levy, e.g. collections, enforcement, finance, media team and economy teams etc
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06 Consultation Discover Scotland Event
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Guidance on the Visitor Levy for local authorities 21 06 Consultation 1. Under the Act, a local authority looking to introduce a VL scheme must prepare and publicise an outline of a scheme, a statement of a scheme’s objectives, and an assessment of the impacts of the proposal. It should also include a statement about when a levy will not be payable or may be reimbursed. 2. The Act requires a local authority to consult on a proposed VL scheme with those it considers representative of communities, businesses engaged in tourism, and local tourist organisations. Following the consultation, the local authority must prepare and publicise a report which summarises the consultation responses, states whether or not the authority intends to proceed with a scheme (or a scheme as modified in light of the consultation), and set out the authority’s reasons for whether or not it intends to proceed. 3. Guidance on consultation best practice can be found in Scottish Government Consultation Good Practice Guidance, and it is recommended a local authority considering a consultation on a visitor levy takes that guidance into account when developing and carrying out any consultation. Proposed scheme 4. Under the Act, a local authority must prepare and publicise: a. an outline of the proposed scheme or (as the case may be) a scheme as it is proposed to be modified (“the proposal”) b. a statement about the objectives of the proposal, including how the authority intends to measure, and report on the achievement of those objectives c. an assessment of the impacts of the proposal in the authority’s area d. a statement about the cases or circumstances where a visitor levy will not be payable or may be reimbursed 5. It is recommended that any proposal for consultation should cover all the elements required in a scheme to allow for an appropriate level of input and discussion with stakeholders. For further information, see Chapter 03 Required Content of a VL Scheme. 6. In setting out a statement about the objectives of a proposed scheme, it is recommended local authorities set out how they have considered a scheme will benefit the local visitor economy. In reporting and measuring this a local authority could use existing mechanisms aligned to an adopted local tourism strategy, and other related local, regional or national strategies which are directly linked to the visitor economy. 7. The local authority should also set out how it intends to capture the wider impacts of the proposal, including the impacts on businesses, visitors and residents. 8. Local authorities should have an existing awareness of the costs incurred by liable persons collecting and remitting a levy through early engagement. See Chapter 05 Early Engagement for more information. Where a local authority decides that assistance to a liable person in addressing costs may be appropriate, possible options for this should be included in the consultation. 9. The local authority should make documents relating to its consultation process available on the local authority website, and at the local authority’s main office during normal business hours.
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Guidance on the Visitor Levy for local authorities 22 Consultation process 10. The Act sets out a requirement to consult such persons as the authority considers to be representative of communities, businesses engaged in tourism and tourist organisations in its area, and any such other persons the authority considers likely to be affected by the proposal. 11. It is for the local authority to determine who the appropriate consultees may be in each circumstance. In determining who to consult it may be useful for local authorities to reflect on the make-up of the visitor economy in their own area and ensure those who will have an interest are captured. Local authorities may consider the following interested parties: a. overnight accommodation businesses in the local authority area that may be responsible for collecting and remitting a proposed levy b. national, regional and local tourism organisations (including VisitScotland) c. local residents d. neighbouring local authorities e. visitors to the local authority area 12. Where a proposed VL scheme area overlaps with an area designated as a National Park, the National Park authority must be consulted. 13. In general, it is recommended that the local authority take steps, as it considers appropriate, for ensuring that adequate publicity about the proposal is given to persons likely to be affected by it. 14. It will be up to the local authority to determine how long it intends to run a consultation for. The timescale chosen should reflect the complex nature of proposals, which relate to self-assessed taxation, which will likely be new to both businesses, and local authorities. In general, it is recommended that 12 weeks is an appropriate time for the formal consultation to take place. 15. In considering timings for their consultation, local authorities should reflect on the legislative requirement to allow at least 18 months to have passed between the date of the local authority’s decision to introduce a scheme, and the date on which a scheme will come into force.
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Guidance on the Visitor Levy for local authorities 23 16. Where a modification to a scheme is proposed, an implementation period of at least 18 months will still apply if the modification: a. expands a scheme area b. increases the percentage rate(s) of the levy c. or removes exemptions Where other modifications are proposed, these may come into effect at a time of the local authorities choosing. This would follow the publication of the relevant consultation report. Consultation report 17. The Act requires a local authority to prepare and publish a consultation report which: a. summarises the consultation responses received b. states whether or not the authority intend to proceed with the proposal (or proposal as modified in light of the consultation) c. sets out the authority’s reasons for whether or not it intends to proceed 18. The local authority may also wish to include information on the number of consultation responses, an overview of who responded to the consultation, and the local authority’s response to the points raised in the consultation responses. 19. Local authorities should carefully consider this report, and their response to the issues raised in consultation, to demonstrate good decision-making in relation to the proposals, and the decision to take forward a scheme, not take it forward, or take it forward adapted in light of the consultation. 20. The consultation report should be published on the local authority’s website and at the local authority’s main office during normal business hours.
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Bike Bute Hire 07 Implementation Period
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Guidance on the Visitor Levy for local authorities 25 07 Implementation Period 1. As set out in the Act, a VL scheme will come into force at least 18 months after the date on which the local authority publishes a report, summarising the consultation responses received, and stating that it intends to proceed with the original proposal or a significant modification to a proposal. This is the implementation period. It will be for the local authority to ensure they communicate the beginning of the implementation period to relevant stakeholders. For further information, see Chapter 02 Timeline and Chapter 20 Communication. 2. This implementation period must be at least 18 months and is intended to allow local authorities, communities, and businesses to prepare for the introduction of a VL scheme, or to prepare for upcoming changes to an existing VL scheme, as agreed to be introduced by the local authority. 3. Within the implementation period, local authorities are encouraged to support key stakeholders, including accommodation businesses collecting and remitting the levy, and community organisations in conducting preparatory work ahead of a VL scheme coming into force. This preparatory work will be important in ensuring an efficient start to a VL scheme. 4. Work conducted in the implementation period should include ensuring that key stakeholders within the local visitor economy (including overnight visitors) are well informed of upcoming changes associated with the VL scheme. This includes both key information associated with a scheme, such as the percentage rate and geographic coverage, as well as information on the objectives of a scheme, and any plans for the use of funds. For further information, see Chapter 20 Communication. 5. For accommodation providers, local authorities may wish to conduct more targeted engagement, providing specific information on the technical aspects of a VL scheme. For further information, see Chapter 05 Early Engagement. 6. In this period, local authorities will need to communicate to businesses when they are expected to begin charging and collecting the visitor levy. Local authorities can also set out to businesses, expectations around remittance/return and payment of the levy, noting that this can only be done for overnight stays that have been occupied in the reporting period. 7. If, through early engagement and consultation, a local authority has chosen to take forward measures to help mitigate costs to businesses as part of a VL scheme, the local authority should take appropriate steps to communicate and implement those measures during this period. 8. It should be noted that the above is not intended to be an exhaustive list of where, and how, local authorities should engage with accommodation providers throughout the implementation period. It is anticipated that a successful VL scheme will see meaningful, and sustained engagement throughout the lifetime of a scheme. For further information, see Chapter 21 Visitor Levy Forum.
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Gaelic Sign, Plockton 08 Equalities
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08 Equalities 1. The Act does not place specific equality duties on a local authority in relation to a VL scheme. However, as public bodies there are requirements related to equalities that will impact on a local authority as it develops, introduces, and administers a VL scheme. 2. It is therefore recommended that local authorities planning to introduce or modify a VL scheme start by considering duties and requirements placed on them under existing legislation, such as the Public Sector Equality Duty, as contained in the 2010 Equality Act, and the 2010 Equality Act (Specific Duties) (Scotland) Regulations 2012, as amended. These pieces of legislation require local authorities to: a. report on mainstreaming the equality duty b. publicise equality outcomes and reporting progress c. assess and review the equality impact of policies and practices d. ensure publication of reports and data on equalities is accessible 3. Through adhering to the duties outlined in the Equality Act 2010 and the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012, as amended, it is believed that local authorities can mitigate the potential for equalities-related issues to occur within the design, implementation, and modification of a VL scheme. 4. However, it is also recommended that local authorities further consider the potential for equalities issues to arise in the implementation or modification of a scheme. 5. Specifically, some of the conditions which are used to define exemptions from the levy charge as set out in Chapter 17 Exemptions, are considered Special Category data. When this is the case, each controller will need to ensure that their processing activities for the administration of exemptions, and associated reimbursements, have an appropriate UK GDPR Article 6 lawful reason for processing, accompanied by an appropriate exemption under UK GDPR Art 9 (Processing of special categories of personal data). Similar consideration should be given to local exemptions should a local authority seek to bring any forward. 6. It is recommended that local authorities actively consider equalities-related issues with regards to the accessibility of messaging and communication. Under existing legislation local authorities are required to ensure that reporting on equalities is accessible. It is recommended that when publishing and communicating with regards to the implementation or modification of a VL scheme, local authorities follow best practice in this area. 7. Due to the potential impact of a VL scheme on a wide range of stakeholders, including visitors speaking different languages, local authorities may wish to further consider the demographic profile of those impacted by a VL scheme (such as residents, businesses or overnight visitors) in messaging and communication. 8. It is recommended that local authorities actively consider the potential for equality-related issues to arise within the consultation process, including when determining consultees, publicising a consultation, and publishing the results through a consultation report. Guidance on the Visitor Levy for local authorities 27
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Rhoderick Dhu Viewpoint, Loch Lomond and Trossachs National Park 09 Scheme Publication
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09 Scheme Publication 1. Once a local authority has agreed to proceed with the introduction of a VL scheme in its area, it must publish its decision to do so. The Act requires a local authority to: a. notify Scottish Ministers of its decision to introduce a VL scheme b. publicise its decision to introduce a VL scheme and the date on which a VL scheme will come into force When to publish 2. The Act requires a local authority to publicise a scheme “as soon as reasonably practicable”. It is recommended that this publicity takes place no later than two months after the local authority’s decision to proceed. Notifying stakeholders 3. The Act requires a local authority to notify Scottish Ministers of its decision to introduce a VL scheme. A local authority may wish to consider how best to communicate the decision to introduce a VL scheme with other stakeholders. 4. In particular, a local authority will need to consider how best to notify those accommodation providers who will be collecting and remitting the levy. Consideration will also be needed on how best to notify accommodation providers of the transitional arrangements for a VL scheme, in particular which bookings made during the implementation period will be liable for the levy. For further information, see Chapter 20 Communication. Guidance on the Visitor Levy for local authorities 29
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10 Calculation of a Levy The Watchers at Corgarff, Cairngorms National Park
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10 Calculation of a Levy 1. The Act sets out the calculation to be applied in determining the amount of a visitor levy that is to be collected and remitted to the local authority. This calculation multiplies the accommodation portion of the transaction by the percentage rate set by the local authority. 2. There is no statutory cap on the maximum number of nights that an overnight visitor would be required to pay a visitor levy. However, a local authority may wish to consider creating a local cap in its VL scheme. This cap could be in the form of a monetary value or represent a maximum number of nights on which the levy applies. 3. In applying a local cap, local authorities should work with stakeholders to consider the impact this would have on visitors, businesses, and potential revenue. For further information, see Chapter 04 Forecasting. The rationale behind the development of a maximum cap should correspond with the objectives of the VL scheme, and local authorities will need to consider the impact of a cap on the administration of a VL scheme. 4. Under the Act, the accommodation portion refers only to the amount of the chargeable transaction that is attributable to the provision of the overnight accommodation. Examples of what this does not include are: a. meals or drinks b. parking for a vehicle c. laundry facilities or services for guests d. entertainment e. leisure facilities f. transportation to and from the accommodation 5. To aid in the calculation of a levy, it is recommended that local authorities ensure that an appropriate amount of information is provided by the liable person to validate figures submitted in the return. Similarly, it is recommended that local authorities provide liable persons with appropriate support. The powers available to local authorities to obtain this information are set out in section 73 and 74 of the Act. For further information, see Chapter 16 Remittance, Chapter 14 Assistance for Liable Persons and Chapter 07 on Implementation Period. Guidance on the Visitor Levy for local authorities 31
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Guidance on the Visitor Levy for local authorities 32 Disability exemption A visitor has booked a hotel room for three nights at a total cost of £150 for the accommodation portion of the transaction. The visitor booked the room directly via the hotel website. The local authority has set a visitor levy charge at 4%. The visitor is in receipt of Disability Living Allowance payments as specified in Section 14 of the Act and is therefore exempt to pay the levy charge (they may still have to pay and be reimbursed). If the local authority chooses to operate exemptions via a process of reimbursement, the following calculation applies: £150 x 4%. As a result, the amount of levy chargeable by the individual to the accommodation provider would be £6, and the accommodation provider would subsequently remit this £6 payment to the local authority. In this example the local authority has put in place a reimbursement process. Therefore, following the completion of their stay, the visitor in receipt of specified disability allowance payments would follow the steps outlined by the local authority to receive a £6 reimbursement from the local authority. If this reimbursement application is successful, the final amount of levy charge retained by the local authority would be £0. If a visitor in receipt of one of the payments outlined in Section 14 of the Act is part of a larger group of overnight visitors, including visitors not covered by Section 14 of the Act, the local authority will decide how calculations to determine levy liability are conducted. For further information, see Chapter 17 Exemptions. Seasonal rate setting As set out in Section 14 of the Act, local authorities have the power to apply a visitor levy charge at certain times of the year, this includes applying different percentage rates at different times of the year. This must be set out in the content of the VL scheme produced by the local authority following the consultation. Examples of how this may operate in practice are set out below: • A visitor has booked self-catering accommodation for a total of seven nights at a total cost of £490 for the accommodation portion of the transaction. The visitor booked the accommodation via an online booking platform. The visit is taking place in March. The VL scheme operated by the local authority only applies a levy charge of 2% in the period of January to April. The following calculation therefore applies: £490 x 2%. As a result, the total amount of levy to be collected and remitted to the local authority would be £9.80. • Another visitor has booked the same accommodation, via the same online booking platform, for a total of five nights at a total cost of £425. This visit is taking place in July. The VL scheme operated by the local authority applies an increased percentage rate during June to September of 5%. The following calculation therefore applies: £425 x 5%. The total amount of levy to be collected and remitted to the local authority would be £21.25. 6. The following examples may aid local authorities and accommodation providers in calculating a levy:
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Guidance on the Visitor Levy for local authorities 33 Bed and breakfast Visitor C stays in bed and breakfast accommodation for a total of six nights at a cost of £480. This total cost includes breakfast supplied by the accommodation providers. The local authority has a set a visitor levy charge at 3%. However, the levy only applies to the accommodation portion of a transaction. The accommodation provider calculates that the cost of the breakfast per day is £6. This amounts to £36 for the duration of the stay. For the purposes of calculating the levy charge, this amount is therefore deducted from the total cost paid by the visitor. The following calculation therefore applies: (£480 – (£6 x 6)) x 3%. The total amount of levy to be collected and remitted to the local authority would be £13.32. Hotel Visitor D stays in a hotel for five nights at a total cost of £250 for the accommodation portion of the transaction. The local authority has set a visitor levy charge at 5%. The calculation to determine the levy amount chargeable can therefore be represented as follows: £250 x 5%. The amount of levy to be collected and remitted to the local authority would be £12.50. Visitor E stays in a hotel for three nights at a total cost of £600 for the accommodation portion of the transaction. The local authority has set a visitor levy charge at 4% but has introduced a maximum monetary cap on the levy of £20 per stay. The calculation to determine the levy amount chargeable can therefore be represented as follows: £600 x 4%. The calculation of the levy is therefore £24. However, because of the maximum monetary cap applied by the local authority, the overall amount of levy to be collected and remitted to the local authority would be reduced to £20. Self-catering Visitor F stays in self-catering accommodation for 14 nights at a cost of £120 per night for the accommodation portion of the transaction. The local authority has set a visitor levy charge at 3% and has applied a local maximum cap on the number of nights at seven consecutive nights. The cost of the accommodation portion relevant to the calculation is therefore reduced from £1,680 to £840. As a result, the calculation to determine the levy amount can be represented as follows: £840 x 3%. Overall, the amount of levy to be collected and remitted to the local authority would be £25.20. Package booking Two visitors have booked a package holiday. This package holiday is for a period of seven nights over multiple locations within the same local authority area: two nights in town A, two nights in town B, and three nights in town C. The package holiday was booked at a total cost of £3,500 (£1,750 per person). This cost includes accommodation, breakfast, transport and excursions. The local authority has set a visitor levy charge at 5%, however this charge only applies to the accommodation portion of the transaction. For the purposes of calculating the levy, costs for breakfast, transport and excursions are deducted from the total cost paid by the visitor. For the visitors stay, this can be worked out as:
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Guidance on the Visitor Levy for local authorities 34 • The cost of breakfast per day is £8 per person. This amounts to £56 per person for the duration of the stay. For the two visitors, £112 is therefore deducted from the total cost paid upfront. • The cost of transport between town A and town B is £3.50 per person, this amounts to £7.50 in total. The cost of transport between town B and town C is £12 per person, this amounts to £24 in total. The cost of transport from town C back to town A is £16 per person, this amounts to £32 in total. For the two visitors £63.50 is therefore deducted from the total cost paid upfront. • The visitors participated in excursions on four of the days during their stay. This was calculated by the accommodation provider to amount to a total cost of £120 per person. For the two visitors £240 is therefore deducted from the total cost paid upfront. • When calculating the levy to be paid for by the two visitors, the following calculation therefore applies: (£3,500 – (112+63.50+240)) x 5%. The total amount of levy chargeable to the local authority would subsequently be £154.23. VAT 7. Any amount charged by an accommodation provider for the visitor levy will be included in their turnover, which is used to determine if they need to register for VAT. It is at the discretion of the local authority to include or exclude businesses that fall below the VAT threshold from a VL scheme. 8. In the UK, VAT is charged at 20% on the price paid for the supply of taxable goods or services, including other taxes, levies and charges. In the case of the visitor levy, when an accommodation provider includes a visitor levy in the cost of the overnight accommodation, then this will form part of what is paid under a contract for the supply of accommodation. This portion of the visitor levy will be subject to the same VAT liability as the accommodation. 9. Where an accommodation provider is VAT registered, it is recognised that there may be variations in the way in which accommodation providers (or booking agents) display accommodation charges to the customer. 10. The table below sets out an example of a levy calculation and associated financial information for VAT registered and non-VAT registered businesses.
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Guidance on the Visitor Levy for local authorities 35 VAT calculation (according to current rates) In this example, an accommodation provider has an accommodation charge of £100 (excluding VAT). With a 5% visitor levy, the calculation is presented below: Table 3: VAT calculation VAT Registered Non-VAT Registered Accommodation charge* £100.00 £100.00 Levy 5% £5.00 £5.00 Total taxable supply £105.00 - VAT on accommodation charge £20 - VAT on visitor levy charge £1 - Total VAT £21.00 - Total cost to customer £126.00 £105.00 Cost breakdown Income to accommodation business £100.00 £100.00 Local authority levy remittance £5.00 £5.00 VAT payment to HMRC £20 + £1 = £21 - Total £126.00 £105.00 *this excludes the non-accommodation portion of the chargeable transaction Continuing to use the example above, at the end of the remittance period, based on 200 room nights sold at a cost of £100 per room, £1,000 will be payable by the accommodation provider to the local authority for the visitor levy.
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Guidance on the Visitor Levy for local authorities 36 This example is based on 200 room nights sold at a cost of £100 per room. Table 4: VAT calculation VAT Registered Non-VAT Registered Accommodation charge * £20,000 £20,000 Levy 5% £1,000 £1,000 Total taxable supply £21,000 - VAT on accommodation charge £4,000 - VAT on visitor levy charge £200 - Total VAT £4,200 - Cost breakdown Local authority levy remittance £1,000 £1,000 VAT payment to HMRC £4,000 + £200 = £4,200 - 11. It is recommended that when conducting communications and publicity as part of the consultation and implementation of a VL scheme, local authorities ensure that the method by which a levy is calculated is made clear to all stakeholders. The efficient operation of a VL scheme relies on a clear understanding on behalf of accommodation providers, visitors, and the local authority regarding how a levy is calculated, and the amount of levy which should be returned to the local authority. 12. There may be instances where there is disagreement on the results of a levy calculation. For example, this may occur when determining the exact amount of the chargeable transaction which can be reasonably attributable to accommodation costs. In particular, where this accommodation cost forms part of a bundle with other elements such as food, parking, or other activities. As set out in the Act, any amounts for other elements need to be “reasonably attributable”. Where a dispute between a local authority and accommodation provider occurs, local authorities should follow a dispute resolution process, in line with existing arrangements and good practice, with regards to other local taxes such as council tax. It is recommended that local authorities use the early engagement period to identify and resolve potential disputes. 13. Overnight accommodation providers can also request an internal review by a local authority, requesting that it looks again at a decision related to their visitor levy liability. For further information, see Chapter 26 Internal Reviews and Appeals.
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Lochrin Basin, Edinburgh 11 Rate Setting
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11 Rate Setting 1. When seeking to introduce a VL scheme, the Act requires local authorities to set the percentage rate that the levy will be charged at and publicise this as part of the outline of the proposed scheme. For further information, see Chapter 03 Required Content of a Visitor Levy Scheme and Chapter 06 Consultation. 2. It will be for the local authority to determine the percentage rate to suit local circumstances. 3. This rate may be different for different purposes or different areas within the local authority area. As outlined in the Act, a local authority could, for example, set different rates in relation to particular events. However, different rates cannot be set for different types of overnight accommodation. 4. This rate applies only to the cost of overnight accommodation and not for additional elements, which may be included in a total price, such as food or entertainment. For further information, see Chapter 10 Calculation of a Levy. 5. The Act gives local authorities discretion over the rate that can be charged, with no explicit cap. However, Scottish Ministers retain the power to set a maximum percentage rate for any visitor levy in Scotland, subject to a required consultation and agreement by the Scottish Parliament. 6. When considering what percentage rate a VL scheme should be set at, it is important that local authorities consider circumstances both within the local area, and in neighbouring authorities. It is recommended that local authorities consider key local factors, such as: a. the performance of the local visitor economy b. the demographic profile of overnight visitors c. accommodation stock 7. It is important that, when starting work on setting a percentage rate, local authorities also consider the outcomes of prior work conducted on forecasting the level of funding a visitor levy could generate. Accurate forecasting is crucial to understanding the viability of a VL scheme. It is therefore important that work conducted on setting a percentage rate takes account of the estimated revenue, which could be generated by different rates, and its relation to setup and ongoing administrative costs. For further information, see Chapter 04 Forecasting. 8. It is recommended that when setting a percentage rate, local authorities consider how the potential revenue generated by a specific rate meets the goals regarding the planned use of funds, as set out in the consultation, and how the use of funds links to the statement of objectives for a VL scheme. For further information, see Chapter 12 Use of Funds. 9. It is recommended that local authorities also consider the impact of a VL scheme on related bodies, such as National Parks. The Act requires that local authorities include the National Park authority in any consultation on a VL scheme, if the area in which a VL scheme would operate overlaps with that of the National Park. Guidance on the Visitor Levy for local authorities 38
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10. It is recommended that, when conducting work on rate-setting, local authorities also consider the rate-setting for visitor levies in neighbouring authorities and other relevant international destinations. 11. Once a percentage rate has been set by a local authority, it is recommended that local authorities explicitly set out the rationale for the chosen rate. This could be achieved through meeting existing requirements regarding publicity or communications associated with the introduction or modification of a VL scheme. For further information, see Chapter 09 Scheme Publication and Chapter 20 Communication. 12. It is recommended that the rationale for the chosen percentage rate is linked to the outcomes sought by the local authority for the local area, and the proposed use of funds as set out in prior communications and reports produced by the local authority. 13. As set out in Chapter 24 Review of a Visitor Levy Scheme, local authorities must complete a review of their VL scheme before the end of the three-year period beginning with the date on which a scheme came into force. A review should be completed before the end of each subsequent three- year period. When planning the review of a scheme, local authorities will wish to be mindful of the requirement for consultation and implementation period (minimum of 18 months) prior to implementing a significant modification to their VL scheme. 14. Once a VL scheme is in place, the Act allows a local authority to increase or decrease the levy rate. Different rules apply if a local authority is looking to increase or decrease the percentage rate: a. Increasing the levy rate: if a local authority decides to increase the levy rate, this qualifies as a significant modification under the Act. As such, once the formal decision has been made by the local authority to increase the percentage rate, informed by the required prior consultation and a report on the consultation findings, an implementation period of at least 18 months must take place before this modification is implemented. b. Decreasing the levy rate: if a local authority decides to decrease the levy rate, this does not require an implementation period, but the required prior consultation and a report on the consultation findings must be carried out. 15. A local authority may specify a maximum number of consecutive nights a levy can be charged. This maximum can only be applied after consulting: a. representatives of communities and businesses engaged in tourism and tourist organisations b. other persons as the local authority considers appropriate Guidance on the Visitor Levy for local authorities 39
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12 Use of Funds Aberdeen Art Gallery
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Guidance on the Visitor Levy for local authorities 41 12 Use of Funds 1. The Act requires a local authority operating a VL scheme to use the net proceeds of a scheme for certain specified purposes. Those purposes are that the funds must facilitate the achievement of a scheme’s objectives and that they should develop, support and sustain facilities and services for or used by visitors to a local authority area for leisure or business purposes. . 2. This places parameters within which funding from a visitor levy can be used, whilst also recognising the importance of local decision making by local authorities. This will mean facilities and services which are used by residents, as well as visitors, could receive funding from a visitor levy, depending on the local authority’s assessment of whether the facility or service is substantially used by visitors. 3. A local authority will also need to consult with representatives of communities, businesses engaged in tourism, and tourist organisations on the use of the funds raised by a levy. A local authority will also have to have regard to any local tourism or other relevant local, regional or national strategy which are directly linked to the visitor economy, when considering how best to use the funds raised. For further information, see Chapter 06 Consultation. 4. Local authorities are required to maintain separate accounts for the money received under the VL scheme. In doing so, local authorities may also wish to consider the use of funds over a number of years or as capital spending. For further information, see Chapter 22 Accounting. General principles 5. Net proceeds raised from a visitor levy must only be used to support the objectives of a VL scheme, or otherwise relate to developing, supporting or sustaining facilities or services which are substantially for or used by persons visiting for leisure or business purposes. The objectives of a VL scheme must themselves relate to developing, supporting or sustaining facilities or services which are substantially for or used by persons visiting for leisure or business purposes. 6. To understand how VL scheme objectives can relate to this, local authorities should have a well- developed understanding of the visitor economy in their area. In this regard, the Act requires local authorities have ‘regard to its local tourism strategy (if any)’. 7. It is important for local authorities to clearly set out how the use of the funds will develop, support and sustain the local visitor economy in line with a local tourism strategy, and other related local, regional or national strategies. 8. Aligning the use of funds with agreed tourism strategies will assist the local authority in making funding decisions that will add value to the local visitor economy, and benefit communities and residents. 9. This approach will allow local authorities flexibility to shape their spending to align with the delivery of those strategies which have already been consulted on and agreed by relevant stakeholders.
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Guidance on the Visitor Levy for local authorities 42 10. A local authority may wish to review the strategic landscape of their visitor economy to ensure they have strategies which are relevant and fit for purpose, in the context of how best to use the funds raised from a visitor levy. In doing so, the local authority may choose to review the local tourism strategy and consider whether it needs to be refreshed in anticipation of a visitor levy (at early engagement stage) or create a tourism strategy where one does not already exist. There are many other related strategies which should be considered in this context. These include, but are not limited to: a. local economic strategies b. regional economic strategies c. Scotland Outlook 2030, Scotland’s national tourism strategy d. related local, regional and national strategies, such as events (Scotland: The Perfect Stage) or culture (A Culture Strategy for Scotland) e. National Park Plans (if applicable) f. tourism focused Business Improvement District Plans (if applicable) g. infrastructure and visitor management plans, such as Strategic Tourism Infrastructure Development of plans 11. The Act also requires the local authority to consult ‘from time-to-time’ in relation to the net proceeds of the levy. Providing stakeholders with early opportunities to engage on how the funds will be spent will help foster support for a scheme. Ultimately, the timings for a consulting process on the use of funds will be for the local authority to decide, taking into consideration their own priorities and the sectors’ capacity to engage during traditional peak periods. For example, local authorities may wish to conduct consultation where changes are proposed to the use of funds following a review or significant modification to a scheme. 12. Facilities and services which are used by residents, as well as visitors, could receive funding from a visitor levy, depending on the local authority’s assessment of whether the facility or service is substantially used by visitors and whether it will lead to a positive impact on the visitor economy. For further information regarding what services or facilities a local authority could choose to allocate funds towards, local authorities may wish to see the case study examples provided via the link below.
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Guidance on the Visitor Levy for local authorities 43 13. In the process of assessing whether net proceeds to develop support and sustain a facility or service will meet the objectives of a scheme, the local authority may wish to satisfy itself that the use of net proceeds from the levy: a. is for the direct benefit of people visiting the area for the purposes of leisure/business and will safeguard or enhance the visitor experience AND/OR b. is for the indirect benefit of people visiting the area for the purposes of leisure/business and will help to safeguard or enhance the visitor experience AND c. supports the delivery of objectives in the local, regional, or national tourism strategy 14. How the net proceeds of a scheme have been used and the performance of a scheme in relation to its objectives must be included in the annual report for a scheme. For further information, see Chapter 23 Annual Reporting. 15. The Visitor Levy Forum established by the local authority will need to be engaged with regarding the use of funds given the important role the Forum plays in providing a means for ongoing engagement on a VL scheme. The Forum will discuss and advise the local authority on the use of funds from a VL scheme. For further information, see Chapter 21 Visitor Levy Forum. 16. To aid transparency around how the funds are being used, local authorities are encouraged to consider applying various means to communicate this information to the public, including visitors and businesses. In particular, local authorities may want to consider the publication of fund expenditure on its website. Case study examples 17. A bank of case study examples on various aspects of the visitor levy is being developed and updated here. Local authorities considering how best to make use of funds accrued from a visitor levy are encouraged to reflect on the examples from time-to-time. Timeline 18. Local authorities will want to consider how they wish to use the net proceeds of a visitor levy at the earliest opportunity. How the funds are used in relation to the objectives of a scheme will then be a key measure of the success of a scheme. 19. On an annual basis the timing and value of levy income received may vary from that forecasted, and in turn proposals for use of funds may need revised. Therefore, local authorities will need to ensure their mechanisms around use of funds can accommodate such circumstances. Revisions to proposals for the use of funds may also be required where there is an external shock to local authority finances such as a global or national event outwith the local authority’s control. Decisions on such revisions should adhere to the established process for use of funds in the VL scheme.
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Guidance on the Visitor Levy for local authorities 44 20. The following sets out the points at which a local authority should be considering or acting in relation to the use of funds. a. Tourism strategy: a local authority should have regard to, and align with, the objectives of relevant local tourism strategies, and other related local, regional and national strategies which are directly linked to the visitor economy. b. Early engagement: this represents an opportunity to engage with key stakeholders on how the funds might be used. c. Consultation: as part of this process the local authority will need to set out its objectives for a scheme, this should include how it intends to use the funds. Stakeholders will then have an opportunity to comment on these proposals.` d. Implementation period: this would be an ideal opportunity for the local authority to continue engagement with the public, including visitors and businesses, on how the funds will be used. e. Visitor Levy Forum: the Forum must be involved where the local authority has a duty to carry out a consultation. This includes around any proposed changes to where the use of funds from a VL scheme will be spent. f. Publication: local authorities may wish to publicise how the funds are being spent on an ongoing basis. This would aid transparency for those paying and collecting the levy. g. Annual reporting: the local authority is required to report on a scheme annually, including on how the net proceeds of a scheme have been used. h. Review of a scheme: local authorities with a scheme will be required to review that scheme every three years. As part of this process a local authority should consider how it is using the funds and any potential changes it may want to make. i. Ongoing consultation: the Act requires local authorities to consult from time-to-time on the use of the funds. Local authorities should consider how best, and how often to do this according to their own circumstances.This should take into account the ability of the tourism sector to engage during busy peak periods, as well as the need to have regard to a local tourism strategy, and other related local, regional or national strategies. As part of this requirement local authorities are obliged to consult with a National Park authority where all or part of a scheme overlaps with the area of a National Park. The local authority should also have regard to the National Park Plan for that Park.
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13 Liable Persons Jedburgh Abbey
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Guidance on the Visitor Levy for local authorities 46 13 Liable Persons 1. Under the Act, the accommodation provider is the ‘liable person’ as defined by the Act and becomes so when a visitor purchases overnight accommodation. 2. The Act requires that the liable person fulfil certain duties as part of this role. Accommodation providers will have to collect the levy from overnight visitors, remit this to the relevant local authority (which can be done via a third party such as a booking platform) and are responsible for making sure that suitable records and returns are made and kept. When considering retention periods in relation to a VL scheme, it is recommended that local authorities build on best practice and existing regulation in relation to local taxation. The liable person is also responsible for the payment of penalties, if applicable. For further information, see Chapter 25 Compliance. Third parties 3. Under the Act, accommodation providers can enter into arrangements with third parties, such as online booking platforms, tour operators, or destination management companies (DMCs) to collect, remit and pay the visitor levy to the relevant local authority. It will be for the accommodation provider and the relevant third party to come to an agreement, however, third party arrangements for remittance will require local authority consent. There is no obligation on the local authority to offer advice, but it may choose to do so. The accommodation provider remains the liable person in ensuring the completion of these duties. Common scenarios for liable persons 4. It is recommended that local authorities consider a range of common scenarios faced by businesses associated with the purchase of overnight accommodation, which have the potential to cause confusion regarding the status of the liable person. It is anticipated that questions related to these scenarios may be raised by stakeholders following the implementation of a levy and the local authority may wish to provide guidance or support in these (and other areas). For further information, see Chapter 14 Assistance for Liable Persons. Potential examples are provided below: a. Refusal to pay: there may be cases where a visitor who attempts to purchase overnight accommodation refuses to pay the visitor levy. This may occur where a visitor attempts to purchase overnight accommodation at the point of entry to the accommodation premises and not in advance of travel. In this scenario, the accommodation provider would remain the liable person, and could choose to cancel the booking or absorb the cost of the visitor levy. b. Cancellations: accommodation providers often experience cancellations. Where a cancellation happens on a booking that is pre-paid in advance, the business should refund the levy to the visitor and not remit it back to the local authority. For a visitor levy to be remitted to a local authority, a visitor is required to have entered the overnight accommodation and purchased the right to reside in the overnight accommodation for a period specified in Section 3 of the Act, which is paid for. If no payment of a levy from the visitor to the accommodation provider has taken place before the cancellation, no refund is required. In both cases, there would be no liable person as the visitor levy would not apply.
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Guidance on the Visitor Levy for local authorities 47 c. Refunds: accommodation providers may be required to provide refunds to overnight visitors. If a visitor has entered overnight accommodation for the period defined as a night in Section 3 of the Act but is provided with a refund by the accommodation provider, the visitor levy charge would still apply, and the accommodation provider would remain the liable person. Refunds issued to the customers who have already stayed in the accommodation would not automatically include the levy already paid by the visitor, and the liable person would still be required to pay the levy – unless otherwise specified by the local authority. d. Transitional provision: the visitor levy must not be charged where accommodation has been contracted prior to the date on which a local authority formally announces its intention to introduce a VL scheme. However, if a visitor or tour operator books overnight accommodation after a formal local authority decision to introduce a visitor levy has been agreed, and the date of the overnight stay is after the date on which a VL scheme is to come into force, the visitor levy would apply, and the accommodation provider would remain the liable person. It will be for the local authority and businesses to consider arrangements for collecting a levy from bookings made after the VL scheme comes into effect but before accommodation providers have put a system in place. In considering these arrangements, local authorities should be aware of the long lead in times that some businesses have in contracting accommodation bookings. Some examples include, but are not limited to: i. tour operators ii. destination Management Organisations iii. conferences and other business events iv. sporting and cultural events When engaging with these businesses, local authorities should be aware that representative bodies of such organisations may not be based in the local authority area. Data protection 5. A high proportion of accommodation businesses in Scotland are small and operated by sole traders (a “natural person”) as opposed to an established legal entity such as a Limited Company (a “legal person”). As such, certain items of information which might usually be processed by a local authority in the normal course of operations which would be treated as “business data” could actually be considered as “personal data” in the context of Article 4 (1) of the GDPR. 6. In these cases, data about the business run by a sole trader can directly or indirectly identify that individual. Which means that Articles of the UK GDPR are relevant to the processing activity involved and each individual will have rights, which must be upheld when processing such data. There will also be additional obligations for each local authority in terms of Article 5 (data protection principles), Articles 12-22 (data protection rights), Article 25 (data protection by design and default), Article 28 (processor), Article 79 (right to an effective judicial remedy), Article 80 (representation of data subjects) and Article 82 (right to compensation and liability) - this list is for illustrative purposes and is not intended as an exclusive or definitive list.
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14 Assistance for Liable Persons Mull of Galloway Lighthouse
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Guidance on the Visitor Levy for local authorities 49 14 Assistance for Liable Persons 1. There is no statutory requirement for a local authority to provide any specific form of assistance to liable persons. This chapter suggests several areas where local authorities may choose to assist liable persons. However, the form this assistance takes will be based on local needs and circumstances, and the ultimate decision on whether to provide assistance to liable persons, will be decided by the local authority. 2. Where local authorities do choose to provide assistance to liable persons within a VL scheme, this may result in a range of benefits. This may include higher levels of compliance, a reduction in potential disputes, and a more efficient VL scheme overall. 3. Assistance to liable persons could take place across the following key areas of a VL scheme: a. Remittance: in order for a VL scheme to operate successfully, accommodation providers should have a clear understanding of how they are able to make returns to the local authority. This includes the required content of the returns, the agreed reporting period, and the manner by which a return is made. For further information, see Chapter 16 Remittance. b. Exemptions: prior to the introduction of a VL scheme, it is crucial that accommodation providers have a clear understanding of how exemptions will operate. This includes knowledge of who is exempt, the evidence required by the overnight visitor, and how the local authority has chosen to administer exemptions. For instance, if the local authority chooses to administer exemptions via a process of reimbursement, accommodation providers should be provided with information as to how overnight visitors can apply for reimbursement from the local authority. c. Enforcement and compliance: it is important that accommodation providers have knowledge of the powers available to local authorities where they fail to comply with the requirements of a VL scheme. This includes an understanding of specific timescales, any penalty charges set by the local authority, and what may constitute a reasonable excuse for non-compliance. For further information, see Chapter 25 Compliance. d. Billing: accommodation providers could also be provided with key information relating to how overnight visitors should be invoiced. For further information, see Chapter 15 Billing. e. Business costs: local authorities should be mindful to the costs incurred by liable persons as they make changes to comply with a VL scheme. Local authorities should have an existing awareness of these costs as part of engagement with liable persons conducted at the early engagement, statutory consultation and implementation period stages. See Chapters 05 Early Engagement, 06 Consultation and 07 Implementation Period for further information. There are various means through which a local authority may wish to assist liable persons in addressing costs associated with set up and operation in accordance with a VL scheme. It is recommended that in making a decision about business costs, local authorities should assess the impact this assistance could have on both liable persons and the local authority. 4. This chapter will be updated further to reflect the experience of local authorities and liable persons following the introduction of VL schemes.
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15 Billing of Overnight Accommodation Princes Street, Edinburgh
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Guidance on the Visitor Levy for local authorities 51 15 Billing of Overnight Accommodation 1. At an early stage, in preparation for the introduction of the levy, it is strongly recommended that local authorities work closely with accommodation providers to establish what, if any, booking and invoicing systems are currently used by businesses, and how invoicing is handled. 2. It is important to remember that accommodation businesses use a variety of systems to manage bookings and produce invoices. Point of sales systems and property management systems will need to be modified to calculate and display the tax. These systems are provided by third parties and modification will incur charges for the business, as system reports will need to be enhanced to calculate and evidence the charge. 3. Therefore, there will need to be clarity early on as to how the invoicing process will need to work together with reporting required by local authorities. 4. Smaller accommodation providers might not use a digital service. In such cases, local authorities may need to consider how to support those businesses towards adopting an updated process. Alternatively, local authorities will need to ensure that paper-based invoicing and reporting can be accepted on request. For further information, see Chapter 16 Remittance. 5. When agreeing the invoicing format, consideration must be given to the interplay with the Digital Markets, Competition and Consumers Act 2024, which will provide protection to consumers on the display of pricing and The Price Marking Order 2004. 6. Local authorities will need to advise accommodation providers when they should begin charging and collecting the levy. 7. Local authorities have the ability to audit accommodation providers where they consider necessary. This may include requesting additional information to support a liable person’s return to the local authority. 8. Scottish Ministers have the power to set out in regulations requirements for the billing of overnight accommodation with respect to the chargeable transaction. At the time of publication no regulations on billing have been made.
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16 Remittance Belladrum Tartan Heart Festival
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Guidance on the Visitor Levy for local authorities 53 16 Remittance 1. As part of the operation of a VL scheme, the Act requires liable persons to make returns to the relevant local authority. These returns allow a local authority to monitor and administer a VL scheme. For further information, see Chapter 13 Liable Persons. 2. Returns are expected to be made to local authorities on a regular basis, with the exact form and content of these returns up to the discretion of the local authority. However, under the Act, these returns must: a. include an assessment of the amount of the levy payable in respect of the relevant period and each premises where the liable person is the accommodation provider b. be made before the end of the period of 30 days beginning with the end of each relevant period (either each quarter or a period specified by the local authority in a VL scheme) 3. Local authorities can also set out to businesses, expectations around remittance/return and payment of the levy, noting that this can only be done for overnight stays that have been occupied in the reporting period. 4. When developing a VL scheme and considering how returns are made, on what basis returns are made, and the content of these returns, local authorities are encouraged to actively consider the varying capacities of businesses in the local area. It is important that the administrative burden for smaller businesses is reduced to a minimum. 5. For VAT registered businesses, see Chapter 10 Calculation of a Levy for further information. 6. Whilst the requirements in the Act itself are minimal and set out above, a VL scheme offers the opportunity for a local authority to collect relevant data related to the visitor economy. This would allow richer data to help make data-informed decisions in relation to: a. A VL scheme: data is crucial for local authorities to receive a level of information adequate to ensure the efficient operation of a VL scheme, including: i. to have data to help inform and evaluate a VL scheme and its success, which in turn may help to ensure evidence-based decisions are made, i.e. for future modifications to a scheme ii. to influence the most effective and impactful use of spend from the levy iii. to support the validation of the suggested calculation of the levy iv. to enable effective enforcement and compliance information b. The visitor economy: at a local, regional and national visitor economy, having rich, accurate and (close to) real-time data will allow data-informed decisions to be made, which in turn will help achieve the national priorities from our national tourism strategy (Scotland Outlook 2030) to become ‘the world leader in 21st century tourism’.
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Guidance on the Visitor Levy for local authorities 54 Table 5 outlines what information may be considered to be required to validate returns. Table 5: Suggested Information Type of Information Information Required to Validate Return Basic information Name, address and contact details of accommodation provider. Accommodation type See Chapter 01 Power to Introduce a Levy for further details on accommodation type within scope. Occupancy data Capacity of accommodation (e.g. number of rooms, number of beds). Number of rooms or beds in the accommodation premises that are available. Number of occupied overnight stays (e.g. number of nights where a room or bed is occupied by a visitor). Number of occupied overnight stays that are out of scope from VL charge, e.g. homelessness etc. Number of overnight stays that are greater than X nights in duration, if a cap on the duration of nights is locally or nationally determined. Number of overnight stays that are attended by exempted persons if an individual exemption is decided nationally or locally, e.g. qualifying persons, etc. unless another rebate or reimbursement process is locally arranged. Revenue which the levy calculation is based The levy payment is based on the total revenue generated from chargeable accommodation transaction which includes the commission paid to an online travel agent or similar. For further information, see Chapter 10 Calculating a Levy.
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Guidance on the Visitor Levy for local authorities 55 Type of Information Information Required to Validate Return Revenue on which the levy calculation is based Deductions that may need to be subtracted from the total revenue include: Local authorities have the discretion to decide whether to collect data from exemptions (i.e. those exempt under the UK and/or Scottish disability benefit exemption), and should consider the views from others on the best way for it to work so it is as frictionless as possible. Ensuring also that once the scheme is running, there is the opportunity to monitor and review its performance. Total revenue that is out of scope from the charge, e.g. from persons that are homeless or at risk of homeless etc. For further information, see Chapter 17 Exemptions. Total revenue that is part of maximum cap reduction (e.g. a 7-night maximum cap), if applicable. Total revenue that is part of any exemptions (decided nationally or locally, e.g. persons in receipt of disability benefits) unless another rebate or reimbursement process is arranged by the local authority. Reporting frequency State the length of period (up to the local authority to decide, e.g. monthly). Start date of reporting period (e.g. first day of the month). End date of reporting period (e.g. last day on the month). Payment details Method of payment (as specified by the local authority). Auditable records Record of bookings, cancellations and modifications for audit purposes.
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Guidance on the Visitor Levy for local authorities 56 7. Based on the above opportunities outlined in Paragraph 4, local authorities may wish to consider requesting additional optional information beyond that outlined above. Additional information should be considered against overall net benefit and burden on responding businesses. This information should be considered important to meeting the objectives of a VL scheme, and to bringing benefit to the wider visitor economy. 8. It is recommended that local authorities looking to ask for additional information undertake to engage businesses early to establish capacity to provide such additional information, and to establish the overall net benefit of doing so. 9. Where there is a nil return for each period, it is recommended that local authorities encourage liable persons to submit returns. This will ensure the existence of an audit trail necessary for the efficient operation of a VL scheme, and will remove the need for local authorities to submit repeated requests for information from liable persons. 10. Data governance, accuracy and consistency – by acknowledging the secondary benefit of better data collection from undertaking a visitor levy, local authorities should consider exploring the opportunity of reporting research data by working with local and national stakeholders, to ensure appropriate governance, accuracy and consistency. The potential benefit of this could extend to future planning and monitoring that supports the local visitor economy.
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17 Exemptions The Riverside Museum, Glasgow
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Guidance on the Visitor Levy for local authorities 58 17 Exemptions 1. A number of groups do not fall within the scope of the Act and are therefore not liable to pay a visitor levy charge. These groups, with the exception of those in receipt of specified disability payments, are not considered visitors to an area for business or leisure purposes, and are therefore not liable to pay a levy charge. These groups are: a. Those who are using overnight accommodation as their only or primary residence, which could be due to: i. being homeless or at risk of homelessness ii. very poor housing conditions (such as overcrowding, serious damp or disrepair) iii. experiencing domestic abuse or other forms of violence iv. someone’s residence being unfit for habitation v. someone being an asylum seeker or refugee 2. In addition, the visitor levy does not apply to: a. someone staying on a dedicated gypsy/traveller site run by a local authority or a registered social landlord b. those in receipt of the following specified disability benefits, payments, or allowances: i. Disability Living Allowance ii. Disability Assistance iii. Attendance Allowance iv. Pension Age Disability Benefit v. Personal Independence Payment For those who act as carers for overnight visitors in receipt of one of these payments, local authorities should be aware that the Act does not provide a national exemption. Any decision to exempt carers would be up to individual local authorities. 3. Other people not subject to the visitor levy include those who are residing overnight in vehicles or on-board vessels that are undertaking a journey involving one or more overnight stops. As a result, the following forms of overnight accommodation are outwith the scope of the Act: a. the provision of a cabin on a ferry or cruise ship, unless the vessel is permanently moored b. the provision of a cabin on an overnight sleeper train c. use of a hired or privately-owned campervan or motorhome where they are not staying overnight in campsites 4. In addition to those mentioned in paragraphs 1-3 above, local authorities also have the power to put in place local exemptions. As set out in the Act, a local authority must set out the cases or circumstances where the levy is not payable or may be reimbursed. This section also requires local authorities to outline the process through which this exemption is administered or reimbursement takes place. For further information, see Chapter 03 Required Content of a Scheme.
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Guidance on the Visitor Levy for local authorities 59 5. There are a number of factors that local authorities may wish to bear in mind when considering local exemptions. The following list is not intended to be exhaustive, instead providing an overview of some of these factors: a. Purpose and rationale: local authority decisions on who is, and is not, exempt from paying a visitor levy should correspond with the objectives of a VL scheme. Local authorities may wish to consider explicitly stating how an exemption relates to these objectives in the outline of a VL scheme. b. Scope and eligibility: it is important to consider how local exemptions are targeted at the intended groups. In particular, it is important that stakeholders have a clear understanding of who is, and is not, covered by an exemption, and how this exemption is evidenced by the overnight visitor. c. Impact and effectiveness: local exemptions will have an impact on the effectiveness of a local VL scheme. Prior to the introduction of an exemption, local authorities may wish to conduct work on the potential impact on available funds, including through increased administrative costs, and reduced income, which may have otherwise been used to provide additional support to the persons or activity being considered as an exemption. d. Communication and messaging: ensuring that all stakeholders have a detailed understanding of who is, and is not, responsible for the payment of the visitor levy is crucial to the efficient and effective operation of a VL scheme. Local authorities may wish to consider how this information, and the associated arrangements, is communicated to stakeholders. 6. It is recommended that the cases or circumstances where the Levy is not payable by an overnight visitor are set out as part of the outline of the proposed VL scheme prior to the consultation. As such, it is recommended that local authorities begin the process of considering whether to develop a system of local exemptions at an early stage in the development of a VL scheme. This could form a key element of early engagement with local stakeholders, such as residents and accommodation providers. For further information, see Chapter 02 Timeline. 7. How a system of local and/or national exemptions will be administered and monitored will be a key consideration for local authorities. Under the Act, a local authority could have a situation where a visitor is not liable to pay the visitor levy, and so does not pay it upfront or the local authority could develop a process whereby an overnight visitor claims back the visitor levy charge through reimbursement. In this scenario, overnight visitors would still be required to pay the levy charge at the point of entry or booking, with local authorities responsible for administering the reimbursement at a later date.
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Guidance on the Visitor Levy for local authorities 60 8. There are a number of factors that local authorities may wish to consider when developing the administrative arrangements for national and local exemptions. The following list is not intended to be exhaustive, instead providing an overview of some of these factors: a. Administrative burden on accommodation providers: local authorities should recognise the potential administrative burden on accommodation providers resulting from local exemptions. This could include the handling of personal and sensitive data which accommodation providers are not accustomed to processing and increased costs associated with training for employees. b. Local authority administrative costs: local authorities may wish to consider the potential for increased administrative costs associated with the development of local exemptions. This may be particularly relevant where a local authority chooses to reimburse exempt overnight visitors. Higher administrative costs may reduce funds available to the local authority, with implications for the local community and visitor economy. For further information, see Chapter 12 Use of Funds. c. Digital solution: local authorities may wish to consider the availability of appropriate digital solutions in operating any refund or reimbursement payments for persons who are submitting a claim because of an exemption from the levy. d. Enforcement, compliance and notification: it is important that any decisions taken regarding the development of local exemptions consider how these exemptions will be monitored, processed and enforced. This could include what evidence the local authority will deem satisfactory for proof of an exemption, whether this evidence can or should be stored (and the related data protection issues associated with this), and how this evidence will be submitted by the overnight visitor (for further information, see Chapter 25 Compliance), and how overnight visitors are notified that their exemption request has been successful (in cases where a local authority choose to reimburse those who are exempt). e. Evaluation: the local authority may wish to consider how the success of an exemption is monitored throughout the lifetime of a VL scheme. Information on the performance of an exemption may form a key part of the three-year review, and will therefore be crucial to discussion relating to the modification of local exemptions. For further information, see Chapter 24 Reviews.
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Guidance on the Visitor Levy for local authorities 61 9. Under the Act, a local authority may modify their VL scheme to add or remove an exemption, after a VL scheme has come into force. a. Adding an exemption: if a local authority decides to add an exemption to a VL scheme, this does not require an implementation period, but a consultation and a report on the consultation findings is required before a decision can be taken to add the exemption to an existing VL scheme. b. Removing an exemption: if a local authority decides to remove an exemption from a VL scheme, the Act states that this qualifies as a significant modification. In such circumstances the local authority must consult on proposals to remove the exemption and produce a report on the consultation findings. Once the formal decision has been made by the local authority to remove the exemption, an implementation period of at least 18 months should elapse before the exemption is removed. 10. If an overnight visitor disputes the classification of an eligibility or an exemption, the local authority may wish to follow existing practice and procedure in resolving this dispute. The form this process takes will be closely related to the administrative arrangements for exemptions decided by the local authority, as noted above. However, it is important that any dispute resolution process recognises the need to safeguard accommodation providers from potential conflict with overnight visitors, the potential administrative burden on accommodation providers on handling large volumes of complex and sensitive documentation and upholds the overall reputation of a VL scheme. 11. Some of the conditions which are used to define exemptions from the levy charge are considered Special Category data. When this is the case, each collector will need to ensure that their processing activities, for the administration of exemptions and associated refunds, have an appropriate UK GDPR Article 6 (lawful reason for processing), accompanied by an appropriate exemption under UK GDPR Art 9 (Processing of special categories of personal data). 12. There is a risk that the processing of personal data in the context of exemptions to the levy charge may have unintended consequences, causing harm to the individual. Harms may be defined as “Financial Harm” or as “Discrimination”, if processing results in a comparative financial loss or disadvantage. (see ICO document, Overview of Data Protection Harms and the ICO’s Taxonomy, April 2022). The controller will need to ensure processing is appropriate in the context of UKGDPR Articles 5/1/a (fairness) and 22 (automated individual decision making).
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Hebridean Way, Vatersay 18 Islands
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Guidance on the Visitor Levy for local authorities 63 18 Islands 1. The Act makes no specific reference to island communities. However, local authorities considering the implementation or modification of a VL scheme should actively consider potential differential impacts on island communities. Island communities face unique challenges such as declining populations, geographic remoteness, and connectivity difficulties. Where relevant, local authorities will also need to take account of their duties under the Islands (Scotland) Act 2018. 3. As part of the work to consider island communities it is recommended that local authorities consider the following issues when implementing or modifying a VL scheme to mitigate any further potential different impacts: a. Administration: the makeup of the accommodation provider industry across many island communities differs significantly from that found in other parts of Scotland. For example, island communities often contain a higher proportion of small providers and self-catering properties. When local authorities are designing regulations on the administration of a visitor levy in a community which contains islands, it is recommended that local authorities consider the challenges faced by small accommodation providers. b. Enforcement: the tendency for island communities to contain a higher proportion of small accommodation providers may require further consideration by local authorities in terms of enforcement procedures. It is recommended that local authorities with island communities consider the potentially higher cost of enforcement procedures, as a result of smaller returns through penalties, compared to enforcement conducted against large accommodation providers such as hotels or hotel chains. c. Forecasting: due to the potential for higher administrative costs and smaller returns through penalties as noted above, it is recommended that local authorities with island communities actively consider the impact on forecasting conducted prior to implementation or modification of a VL scheme. d. Reporting: the Act requires local authorities to prepare a report on the amount of revenue collected, the use of net proceeds, and the performance of a scheme in relation to its objectives. It is recommended that, when preparing a report, and where both practical, and the relevant data is available, local authorities consider the inclusion of information relating to the impact of a VL scheme on island communities.
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19 Local Flexibilities Castlebay Charging Point, Isle of Barra
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Guidance on the Visitor Levy for local authorities 65 19 Local Flexibilities 1. Local authorities wishing to introduce a VL scheme in their area have a number of flexibilities they can use within their VL scheme. 2. These flexibilities provide local authorities with discretion to implement a VL scheme which meets local circumstances. How these local flexibilities will be used should be a matter for the local authority to decide following the comprehensive consultation process. See Chapter 06 Consultation. 3. The local flexibilities include: a. The ability for a local authority to set different rates for different purposes or areas. This includes the ability to create a cap in the form of a monetary value or a maximum number of nights on which the levy applies. See Chapter 11 Rate Setting. b. The ability to have a VL scheme in all, or specified parts of a local authority area. Two or more local authorities may act jointly to make a VL scheme. c. The ability for a local authority to apply local exemptions. See Chapter 17 Exemptions. d. The ability to set specific times of the year where a purchase of overnight accommodation will give rise to the levy. Local authorities must set out intentions for including or excluding businesses which fall below the VAT threshold. See Chapter 01 Power to Introduce a Levy and Chapter 03 Required Content of a Scheme. e. The ability to set the frequency with which accommodation providers are required to make returns to the local authority. See Chapter 16 Remittance. f. The ability to specify records which must be kept and preserved. See Chapter 16 Remittance. g. The ability to take an approach to compliance and enforcement that works for the local authority. There are no requirements for a local authority to impose penalties or take enforcement action under the Act. See Chapter 25 Compliance.
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Dunfermline Carnegie Library 20 Communication
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Guidance on the Visitor Levy for local authorities 67 20 Communication 1. For a VL scheme to be successfully implemented, appropriate and effective communication with a variety of interested parties at various stages will be crucial. 2. This Chapter of the guidance sets out when in the process communication will be particularly crucial and offers examples of how this may be carried out. Principles of communication 3. There are a number of general principles to guide good communication when it concerns the preparation and establishment of a VL scheme. Those principles are that communication is: a. Accessible: make sure publication of proposed activity(ies) and information is accessible to all relevant stakeholders. This should include (but not be limited to) publication on relevant website and social media channels or through a notification in a public place. Local authorities should consider how communication will be delivered to those people who have communication support needs, such as the provision of alternative formats. In the interests of communicating with visitors, different language formats may need to be considered, so that messages are accessible and easily understood. b. Engaging: consider how opportunities for feedback on communication can be maximised. Setting out how all relevant stakeholders can get involved with the process will be important. Crucial to this is engagement with the businesses and organisations working most closely within the local visitor economy. c. Transparent: demonstrating how feedback has influenced thinking and/or been incorporated into decisions will be crucial to ensuring trust in the final decision making and implementation of the levy. Where views are being sought around the implementation of a VL scheme, the body seeking those views should consider how it can best reflect the actions it has taken on the basis of feedback provided. d. Ongoing: open and engaging communication with stakeholders should continue in the long-term. Where a levy is being implemented it will be important to communicate where and how businesses can get support to implement changes to their operation. 4. All stakeholders concerned with the operation and implementation of a VL scheme have an obligation to ensure that they communicate in a manner that allows stakeholders to respond appropriately. When to communicate 5. In some instances, the Act places duties on local authorities to communicate aspects relating to the implementation of a VL scheme. There are other instances where no statutory requirement exists, but where appropriate communication would be helpful to all involved and doing so would demonstrate best practice. 6. The following ‘model timeline’ (Table 6) sets out the parts of the process where communication will be required and how the general principles outlined above may be applied to each case.
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Guidance on the Visitor Levy for local authorities 68 Table 6: Communication Timeline Early engagement (non-statutory): Early engagement will establish a strong foundation for collaborative development of a VL scheme. For further information, see Chapter 05 Early Engagement. Consultation (statutory): The local authority is required to conduct a public consultation on its proposal for a VL scheme. Standard practice would be for a consultation that lasts 12 weeks. For further information, see Chapter 06 Consultation. Implementation period (statutory): VL scheme will come into force at least 18 months after the date on which the local authority publishes a report summarising the consultation responses received, stating that it intends to proceed with the original proposal or a significant modification to a proposal. This period is an ideal opportunity to work with accommodation providers, communicating with them around their duty to collect and remit the levy. Local authorities should make it clear to stakeholders when the implementation period begins and when it will finish, and the levy be introduced. For further information, see Chapter 07 Implementation Period and Chapter 14 Assistance to Liable Persons. Publicity for introduction of scheme (statutory): Local authorities wishing to introduce a VL scheme must notify Scottish Ministers of its decision, publicise its decision and publicise the proposed date on which the visitor levy will come into force. For further information, see Chapter 09 Scheme Publication. Visitor Levy Forum (statutory): The Visitor Levy Forum must be established within six months of the local authority formally announcing that it will implement a VL scheme. Thereafter, the Forum will be involved where the local authority has a duty to carry out a consultation. For further information, see Chapter 21 Visitor Levy Forum. Ongoing communication (non-statutory): Visitors will need to understand how much the percentage rate(s) will be, and how, and when they will be collected. Stakeholders will welcome ongoing information on the use of funds. Local authorities may develop an ongoing communications plan to highlight to visitors, businesses and communities, what the levy is and the difference it is making. Compliance (statutory): Communications around compliance will be crucial. It is recommended that local authorities produce materials and advice for accommodation providers to assist them with the technical aspects of compliance. For further information, see Chapter 25 Compliance and Chapter 14 Assistance for Liable Persons. Annual reporting on scheme (statutory): the annual report should detail the amount of money collected, and how the net proceeds have been used. The report should be published as soon as possible at the end of the reporting period, and in a manner that the authority considers appropriate. For further information, see Chapter 23 Annual Reporting. Review of scheme (statutory): a local authority operating a VL scheme is required by the Act to review it every three years. It should also publish the findings of its review as soon as possible. For further information, see Chapter 24 Review of a Scheme. Use of funds (statutory): Local authorities that operate a scheme are required to consult on the use of funds. Where a local authority consults on the use of funds it should involve the Visitor Levy Forum. For further information, see Chapter 12 Use of Funds and Chapter 21 Visitor Levy Forum.
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Scalpsie Bay, Argyll and the Isles 21 Visitor Levy Forum
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Guidance on the Visitor Levy for local authorities 70 21 Visitor Levy Forum 1. As set out in the Act, a local authority that introduces a VL scheme is required to establish a Visitor Levy Forum. The Forum must be established by the local authority no later than six months after the date of the decision to introduce a VL scheme. The local authority must maintain the Forum for the duration of a scheme and ensure that it has both the ability to carry out its functions and meet on a regular basis (defined as not less than two times per calendar year). 2. Where a local authority is operating multiple VL schemes within the local authority area, the Act provides the power to establish multiple Forums corresponding to each individual scheme. Alternatively, the local authority also has the power to establish a single Forum covering multiple VL schemes. 3. The function of a Forum is advisory. Its purpose is to provide advice to the local authority in a number of areas relating to the operation of a VL scheme. It will be for the local authority to establish its own decision-making process in relation to areas the Forum has provided advice on. 4. Once a VL scheme is established, the Forum must be involved where the local authority has a duty to carry out a consultation. For instance, where it is proposed to modify a VL scheme, or change the planned use of funds from a VL scheme. A local authority must also provide the Forum with copies of each annual report and the review of the VL scheme carried out every three years. 5. It is intended that a Forum ensures that businesses, communities and organisations related to the visitor economy have a robust mechanism to conduct effective ongoing engagement with the local authority once a VL scheme has been introduced. 6. The membership of the Forum is to be determined by the local authority operating a VL scheme. Under the Act, membership must contain a reasonable balance of representatives from communities, businesses engaged in tourism, and tourist organisations. It is recommended that local authorities give consideration to appointing representatives from all aspects of the visitor economy, according to local circumstances. 7. When considering the makeup of the Forum, local authorities may wish to give thought to how the Forum best reflects the strengths and assets of the visitor experience in the local authority area. In particular, those organisations or bodies who have a key role in the development of the local visitor economy. This could include, but may not be limited to: a. major cultural events and festivals taking place in the area b. organisations with a role to play in heritage and sustainability c. accommodation providers directly involved in collecting and remitting the levy in the local area 8. Forum membership may also include elected members. However, elected members must not make up a majority of the Forum. Though local authorities may wish to appoint elected members to the Forum to provide more effective links to the ongoing work being conducted within a VL scheme, and the decision-making processes of the local authority, elected member representation on the Forum is optional, and there is no duty for local authorities to appoint elected members to the Forum.
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Wemyss Bay Railway Station 22 Accounting
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Guidance on the Visitor Levy for local authorities 72 22 Accounting 1. The Act requires that local authorities: a. keep a separate account for a VL scheme b. credit the account with the net amount of money received under a VL scheme (including penalties) minus refunds issued c. debit the account with the expenses of operating a scheme d. observe any other accounting guidance that may relate to the levy e.g. Local Authority Scotland Accounts Advisory Committee (LASAAC) accounting guidance or similar 2. There is no requirement, as set out in the Act, for local authorities to outline the total use of funds through accounting requirements. However, as best practice, alongside the four requirements as set out above, local authorities may wish to include a single line stating “the use of proceeds of a scheme” when accounting for a VL scheme. This would sit alongside more detailed reporting in Chapter 12 Use of Funds and Chapter 23 Annual Reporting. 3. The Act also provides Scottish Ministers with the power to introduce further regulations specifying the form of the account, publication of the account, and processes, where local authorities implement a joint VL scheme. 4. At the time of publication, the Scottish Government has indicated there are no plans to produce regulations in this area. However, guidance is being produced by LASAAC. 5. When considering accounting practices in relation to a VL scheme, it is recommended that local authorities build on best practice and existing regulation in relation to other local funds, as well as in audit and governance arrangements. 6. Local authorities may also wish to consider the accounting implications regarding the use of funds over a number of financial years. The Act does not stipulate that revenue generated by a levy should be used within a certain time period. Local authorities may choose to carry funds forward between years or place funds in reserve. This may be particularly relevant in the early years of a VL scheme, where estimation of expected levels of net levy proceeds may be more difficult to predict.
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An Ceann Mòr, Inveruglas 23 Annual Reporting
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Guidance on the Visitor Levy for local authorities 74 23 Annual Reporting 1. Within the first 18 months from when a VL scheme comes into force, and for each 12-month period following this, local authorities must prepare a report setting out: a. the amount of money collected b. how the net proceeds have been used c. the performance of a scheme in relation to its objectives 2. This report must be produced as soon as is reasonably practicable after the end of the reporting period, and in a manner which the local authority considers appropriate. When producing the report, it is recommended that local authorities recognise that transparency will be key for local stakeholders with an interest in the operation of a visitor levy. Accessibility should therefore be a key consideration for local authorities when publishing the annual report. 3. This report may be linked to other forms of regular financial reporting conducted by local authorities throughout the year, and as such local authorities may also wish to include information over and above that defined by the Act. However, the need to avoid overly onerous reporting requirements should be recognised. 4. It is important to note that the annual report performs a different function to the review, conducted over a period of up to three years. These reviews may offer extended, in-depth information on the operation of a VL scheme over a longer period of time. For further information, see Chapter 24 Review of a Scheme.
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The Larch View Route, Forest of Ae, Dumfries 24 Review of a Scheme
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Guidance on the Visitor Levy for local authorities 76 24 Review of a Scheme 1. Under the Act, a local authority is required to review a VL scheme after a set period. The first review must be carried out within three years of a VL scheme coming into force. Second and subsequent reviews must be carried out within three years of the previous review. The results of the review must be published, and a copy sent to the relevant Visitor Levy Forum. 2. It is for each local authority to decide how they wish to carry out the review. However, it is recommended that there is a clear formal decision to start the review, with a clear process around how the conclusions of the review will be considered, and how any actions resulting from the review will be decided and implemented. Therefore it is recommended that a local authority sets out a timeline for the review, with dates for when the review will start and conclude, and any key milestones during the review’s progress. 3. The administrative costs of a VL scheme, such as the costs for the review of the VL scheme, can be taken from the funds raised by a scheme, and will be a matter for the relevant local authority. 4. While the exact scope of the review will be for a local authority to determine there are some topics that it would be considered good practice to cover. These include: a. how a VL scheme has performed in relation to its objectives b. the outcomes to which a VL scheme has contributed, including links to relevant tourism strategies c. the impact of a VL scheme on businesses, both those directly and indirectly affected by a VL scheme d. the impact of a VL scheme on local communities e. how funding raised by a VL scheme has been used, and an assessment of what benefits that has brought about f. how a VL scheme has been administered, and any lessons that can be learnt to improve administration for the local authority and businesses 5. It is considered good practice for the review to fully involve those affected by a VL scheme. This would include visitors, accommodation providers, tourism organisations, community groups, and others, and it is recommended that a local authority considers how best to involve relevant stakeholders in the review. The Visitor Levy Forum established by the local authority will need to be fully involved in the review, given the important role the Forum plays in providing a means for ongoing engagement on a VL scheme.
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25 Compliance Ballater Highland Games, Aberdeenshire
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Guidance on the Visitor Levy for local authorities 78 25 Compliance 1. The Act gives local authorities a range of powers to enforce compliance with a VL scheme or delegate powers of enforcement and compliance to a third party. These powers are in line with those already available to local authorities in ensuring compliance with other local taxes, such as council tax and non-domestic rates. 2. It is recommended that local authorities build on existing best practice when considering the enforcement of penalties. The use of penalties should be a last resort, and only used after other compliance actions have failed. Where a local authority has an effective register of liable persons and record keeping process, this shall help to reduce the potential for enforcement to be necessary. 3. As outlined in the Act, these powers give local authorities the ability to: a. obtain information and documents from liable persons and third parties b. enforce compliance with information notices c. powers to enter and inspect the premises of liable persons or third parties d. powers to copy and remove documents e. powers to obtain access to, inspect and check the operation of any electronic device, associated apparatus, or material f. powers to inspect business premises, and business premises of third parties g. disclose and share relevant information to: i. relevant local authority authorised officers ii. other local authorities iii. a person authorised to carry out collection and enforcement functions h. impose penalties: i. failure to make valid and complete returns ii. failure to keep and preserve records iii. failure to comply or obstruction iv. providing inaccurate information v. concealing or destroying relevant documents 4. When sharing data as part of the exercising of a local authority’s enforcement duties, it is recommended that local authorities build upon existing best practice, ensuring compliance with existing legislation such as UK GDPR regulations and the Data Protection Act 2018.
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Guidance on the Visitor Levy for local authorities 79 5. Where liable persons report difficulties in meeting the reporting requirements set out by the local authority, the liable person is expected to make all reasonable effort to rectify the situation within three months of the original deadline or alternative period, as determined by the local authority. 6. As set out in the Act, where a liable person has either, failed to supply a return, or the local authority believes that a return supplied is incorrect, the local authority has the power, once regulations are made, to make an assessment of the levy payable by the liable person. The purpose of the powers in the Act is to give the local authority operating a VL scheme a mechanism to use in compliance situations, rather than having to immediately rely on penalties. When doing so, the local authority should ensure that it has the relevant information to conduct this assessment. 7. Where liable persons fail to make a return in the manner specified by the local authority, and where there is no reasonable excuse provided by the liable person, local authorities have the power to apply penalties at agreed time periods. The penalty rate for each time period is up to the discretion of the local authority, and they may wish to consider using existing agreed penalty charge approaches. For further information, see Chapter 13 Liable Persons. 8. The Act also sets out a range of further scenarios where local authorities may wish to apply penalties, with the amount of these penalties to be determined by the local authority: a. where the liable person fails to pay the total amount of the levy b. where the liable person fails to keep and preserve records c. where the liable person fails to comply with an information notice or deliberately obstructs an authorised officer or person authorised by the officer in the course of an inspection d. where the liable person provides inaccurate information or produces a document that contains an inaccuracy e. where documents subject to an information notice are concealed, destroyed or otherwise disposed of 9. As outlined in the Act, the liable person may have a reasonable excuse for failing to comply with these requirements. The definition of a reasonable excuse does not include the following: a. insufficient funds, unless attributable to events out with the liable person’s control b. reliance on any other person to do anything related to making a return, unless the liable person took reasonable care to avoid failure c. where a liable person previously had a reasonable excuse, but this excuse has ceased d. economic fluctuations which may be affecting the liable party’s business
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Guidance on the Visitor Levy for local authorities 80 10. There are a wide range of scenarios where a liable person could be seen to have a reasonable excuse for not submitting a return. In these cases, the local authority may wish to obtain evidence from the liable person to demonstrate this case. 11. The following list of potential examples of reasonable excuses should not be treated as exhaustive, and each case should be considered on individual merit by the local authority: a. Technical: the liable party is unable to access an online portal due to technical IT issues affecting all providers. The provider shall submit their return as soon as possible after issues with the portal are resolved, and within the deadline specified by the local authority. b. Illness or personal emergency: in cases where the liable person is incapacitated due to illness or experiences a personal emergency, the local authority may extend the deadline. c. Natural disasters or extreme weather: severe weather events or natural disasters that disrupt normal business operations may be considered a reasonable excuse. d. Loss of data: data loss or destruction of records due to reasons beyond the liable person’s control, including cyber-attack, hardware failure or theft. e. Legal or regulatory compliance: instances where the liable person faces legal or regulatory challenges that prevent them from complying within the deadline. This may include a dispute with tax authorities or compliance with a court order. f. Local authority delay or error: this could include errors, misunderstandings, or delays on the part of the local authority, leading to miscommunication or administrative errors. For example, this could also include changes in reporting requirements. 12. For more information on areas related to compliance please see Chapter 13 on Liable Persons and Chapter 10 on Calculation of a Levy.
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Shandwick Stone, Tain 26 Internal Review and Appeal ©Mark Janes
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Guidance on the Visitor Levy for local authorities 82 26 Internal Review and Appeal 1. An overnight accommodation provider is able to ask for an internal review by a local authority, so that it looks again at a decision related to their visitor levy liability, such as a decision to serve an information notice or apply a penalty. Once an internal review has been carried out then an accommodation provider, if still unhappy with the local authority’s decision, can appeal to the First Tier Tribunal. The details of the internal review and appeal processes will be fully discussed with stakeholders in due course, but they are likely to follow existing procedures for other local taxes, and so be familiar to both local authorities and businesses. 2. Therefore local authorities should keep abreast of Scottish Government work on the internal review and appeal process, and make sure they have the necessary resources to carry out effective internal reviews and handle any appeals, in line with the regulations that will be put in place. Perth Museum
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Adam Smith Heritage Centre, Kirkcaldy 27 Registers
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Guidance on the Visitor Levy for local authorities 84 27 Registers 1. Under the Act, a local authority has the power to establish and maintain a register of liable persons. This is not a mandatory requirement but at the discretion of the local authority. For further information, see Chapter 13 Liable Persons. This register can include the following information: a. the names of all liable persons offering overnight accommodation in the area covered by a VL scheme b. the addresses of all premises for overnight accommodation in the area covered by a VL scheme c. other information which the local authority considers necessary to allow it to carry out its functions under the Act 2. Under the Act, local authorities can share information with the following people or organisations, where it is necessary for the performance of a function as part of a VL scheme: a. relevant local authority officers b. other relevant local authorities where they have introduced a joint scheme c. a person authorised by the relevant local authority to carry out a function or functions of the authority 3. When considering the development of a register of liable persons as part of a VL scheme, local authorities should start by considering their duties under existing legislation and building on best practice and existing sources of information. 4. Local authorities are required to conduct a number of duties under the Data Protection Act 2018 and UK GDPR regulations. These include: a. only collecting information that is required b. keeping personal information secure c. not keeping information longer than necessary d. stating why the holding of personal information is required e. stating the purpose of data collection f. collecting data which is accurate and up to date g. not using personal information for purposes other than that stated
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On behalf of Whereas every effort has been made to ensure that the information in this document is accurate, VisitScotland does not accept liability for any errors, omissions or misleading statements, or for any loss, damage or inconvenience caused as a result of reliance on such information. VisitScotland is not responsible for the content of external websites which are linked to from this document. Stones of Stenness. Orkney