Seòmar agus comataidhean

Amendment 5 will confer on the Scottish ministers a regulation-making power to allow for the amendment of the visitor levy returns that are submitted to local authorities by accommodation providers. The returns assess the amount of levy that is to be paid to local authorities.

As committee members may recall, earlier this year, regulations were laid under section 45 of the 2024 act that set out the process by which a local authority may make or substitute an assessment where the authority has reason to believe that a return should have been made but has not been, or where a return made

“is incorrect by reason of careless or deliberate miscalculation.”

The 2024 act contains no similar provision to allow a process to be established for a liable person to amend a return made by them when they discover an error after the return has been submitted, and that error was not deliberate or careless. The new power will allow for a consistent process to be established for the amendment and correction of returns, whether at the request of the accommodation provider or on the initiative of a local authority. Draft regulations will need to be approved by the Parliament before they can be made.

Amendment 10 will correct a minor error in section 45(3) of the 2024 act. The effect of the provision is otherwise unchanged.

I ask committee members to agree to amendments 5 and 10.

I move amendment 5.

No.

Amendment 5 agreed to.

Section 4 agreed to.

After section 4

Amendment 6 moved—[Ivan McKee]—and agreed to.

Section 5 agreed to.

After section 5

This group of amendments seeks to modify section 19 of the Visitor Levy (Scotland) Act 2024. Section 19 requires net proceeds to be used to facilitate the achievement of scheme objectives, and when that is not needed, any surplus amount must be used for the purpose of

“developing, supporting and sustaining facilities and services which are substantially for or used by persons visiting … for leisure or business purposes (or both).”

That purpose captures many of the things that Stephen Kerr’s amendments seek to cover. To that extent, they are unnecessary. However, the amendments would also require any such surplus to be used for other purposes, too, that are not considered appropriate.

Amendment 14 would require the surplus proceeds to be spent on measures that reduce costs on tourism businesses. The current provision in section 19 already provides that net proceeds are to be used for purposes that are broad enough to cover the matters that are mentioned in proposed new sub-paragraph (ii) (A), (C) and (D) without the need for the amendment. The amendment would require the proceeds to be used for all the listed purposes, removing local discretion for authorities to apply funding where they consider it is most needed. In addition, “policing”, which is mentioned in proposed new sub-paragraph (ii) (B), is the responsibility of Police Scotland. Requiring local authorities to spend surplus net proceeds on any such policing matters would not be appropriate.

Amendment 15 would require authorities to spend net proceeds on measures that are related to mitigating the cost of regulating the tourism industry, but that includes costs that do not appear to relate to the operation of visitor levy schemes. In addition, it is unclear what is meant by

“enforcement measures targeting unfair competition within the tourism industry.”

The amendment would appear to require surplus net proceeds to be used for the purpose of mitigating the cost of any regulatory activity that is connected to the tourism industry, as it is not limited to costs that are attributable to local authority regulatory activity. I am not persuaded that that is necessary. In my view, it is sufficient that local authorities may use any surplus net proceeds for the purpose of

“developing, supporting and sustaining facilities and services which are substantially for or used by persons visiting”

the area of the local authority

“for leisure or business purposes”.

Amendment 16 would require local authorities to spend surplus net proceeds for the purpose of measures that offset costs and charges on the tourism industry. It is difficult to see how that could be achieved without the authority giving some form of financial assistance or compensation to businesses. In particular, any such surplus would be required to be used for the purpose of measures that offset licensing fees that are imposed on the tourism industry. That would undermine the policy intention behind their imposition, with licensing fees usually set on a cost recovery basis that does not generate revenue for the authority.

For those reasons, I urge members not to support amendments 14 to 16.

Amendment 17 would impose a duty on the Scottish ministers to put in place a process for reviewing visitor levy schemes, but only where a local authority is using the net proceeds for improper purposes. It is not clear what the effect of the review process would be.

The Visitor Levy (Scotland) Act 2024 already requires local authorities to use net proceeds for the purposes that are set out in section 19. It would not be lawful to use such proceeds for another purpose. Section 20 of the 2024 act requires an authority to publish annual reports on its visitor levy scheme. The reports must include information on the amount of money collected, how the net proceeds have been used and the performance of the scheme with reference to its objectives. That provides a regular opportunity for the authority to demonstrate propriety of spend. Section 21 of the 2024 act provides for three-year reviews by the local authority of the operation of a visitor levy scheme. The authority must publish a report of its findings. Taken together, these provisions already provide a robust monitoring and reporting mechanism. It is not clear how the additional review would enhance the existing processes.

There is also a critical role for the authority’s visitor levy forum, with the forum being consulted on how net proceeds from visitor levy scheme are used, annual reports and reviews of schemes, satisfying the interests of transparency.

Section 22 of the act also gives the Scottish ministers power to regulate the process to be followed by a local authority when introducing, administering, reporting on or reviewing a scheme.

For those reasons, I ask members not to support amendment 17.

Amendment 18 would require a local authority’s annual report on a visitor levy scheme to include information about how the scheme has impacted on visitor numbers, length of visitor stay and the viability of tourism businesses.

As I mentioned, section 20 of the 2024 act already requires a local authority to provide information in its annual report on the performance of the scheme by reference to the scheme objectives. Section 13 also requires the authority to consult in advance on how it intends to measure and report on the achievement of those objectives. Where it is relevant to the objectives, local authorities may include information in its annual report about the matters mentioned in the amendment, provided that that information is available and reliable.

Although I appreciate the intention behind amendment 18, it is not clear to me that the particular information sought will always to be relevant in relation to the objectives of a visitor levy scheme. I therefore ask members not to support it. However, I am happy to explore whether statutory guidance provided by VisitScotland for local authorities could be updated to include additional guidance on the content of annual reports.

Amendments 1, 2, 3, 7 and 8 relate to setting the levy on a fixed-amount basis. The bill as introduced sought to modify the Visitor Levy (Scotland) Act 2024 to allow for a visitor levy to be set as a fixed amount on a per-night, per-chargeable transaction basis, or on a per-person, per-night, per-chargeable transaction basis. Those options were in addition to the existing percentage basis.

However, throughout stage 1, industry representatives and committee and parliamentary colleagues expressed concern about allowing for a fixed amount to be set on a per-person, per-night basis. It was suggested that such a basis was not operable and that it placed an unreasonable new burden on accommodation providers to confirm the number of visitors for which accommodation is provided on a particular night. I have heard those concerns.

Amendment 1 has the effect of removing the option of setting a fixed amount per person per night, and it replaces the option to set a fixed amount per night with an option to set a fixed amount per room or area per night. That ensures that the same amount of levy is chargeable for each room or area, regardless of whether the right to reside there is purchased with other rooms or areas.

A room or area can be a bunk, a pitch, a self-catering camping pod or an apartment, as well as a room in a hotel or bed and breakfast.

Amendment 2 prevents the levy from being applied to a room or area that has been provided free of charge, as may be the case, for example, when a room is provided on a complimentary basis to the driver of a coach group.

Amendment 3 provides for situations where a scheme sets different amounts of levy for different categories of accommodation, for example one for hotel rooms and a different one for campsite pitches. In this case, the total amount of levy chargeable on a booking will be a sum of different amounts, each multiplied by the number of rooms or areas within each relevant category.

Amendments 7 and 8 are consequential amendments to provisions in the schedule relating to the billing of levies.

I move amendment 1.

Amendment 1 agreed to.

Amendments 2 and 3 moved—[Ivan McKee]—and agreed to.

Section 1, as amended, agreed to.

15:00

After section 1

:Yes. None of my officials are saying that I am wrong, so I must be right.

:Convener, I refer to my earlier comments.

:I will ask my officials to come in on some of the detail on that. In general, it is about the point at which the tax is levied or becomes due, which would typically be about where it is used. If it is quarried in Scotland and used in Scotland, the tax is payable in Scotland. In scenarios where it is moved across the border in either direction, the point at which the quarry sells it on to the intermediary is the point at which the liability would arise. There would obviously be various scenarios within that, and it is important that we use the regulations to make sure that all the scenarios are considered, so that there are no loopholes.

The Scottish Government is working closely with the United Kingdom Government, His Majesty’s Revenue and Customs, and Revenue Scotland to ensure the successful introduction of the Scottish aggregates tax. This has included productive engagement on cross-border legislation to ensure that the administrative arrangements for the Scottish aggregates tax and the UK aggregates levy work together effectively.

The three Scottish statutory instruments that are under consideration today make provisions that are required to ensure the practical operation of the Scottish aggregates tax, which the Scottish Government remains on track to deliver on 1 April 2026.

The Scottish Aggregates Tax (Miscellaneous Amendment) Regulations 2026 cover the tax treatment of aggregate that is collected and transported across the border and complex multistage supply chains involving intermediaries. This is a type of indirect supply where a business acts as an intermediary between the aggregate producer and the end user of aggregate—for example, a builders’ merchant.

The regulations provide taxpayers with clarity on the operation of the Scottish aggregates tax. They are intended to prevent double taxation, minimise market distortion and support a smooth transition from the UK aggregates levy to the Scottish aggregates tax. The approach taken follows detailed and close collaboration with Revenue Scotland, HMRC, and industry stakeholders, including through our expert advisory group. That engagement preceded a public consultation that was held in June last year on proposed approaches and continued following the closure of the consultation to ensure that all relevant cross-border scenarios had been considered. Following engagement with HMRC, complementary amendments to the UK aggregates levy legislation are being made through the Finance (No 2) Bill to ensure that the two taxes dovetail.

The SSIs under consideration today also include the Revenue Scotland and Tax Powers Act (Involved Third Party) Amendment Order 2026, which makes provisions that enable the inspection of the business premises of involved third parties for the purposes of the tax.

In addition, the Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Amendment Regulations 2026 provide that interest on an amount of unpaid Scottish aggregates tax is due from the filing date of the tax return for the purposes of the tax.

The changes made by these two SSIs are made under the Revenue Scotland and Tax Powers Act 2014, and were consulted on as part of the Scottish aggregates tax administration regulations public consultation. The SSIs will ensure that the Scottish aggregates tax is operationally effective in line with the wider legislative regime for the devolved taxes.

The three instruments are intended to support the effective and efficient administration of the Scottish aggregates tax by Revenue Scotland. In particular, introducing secondary legislation and provisions in relation to certain cross-border movements of aggregate will enable taxpayers to understand the tax treatment of those movements under the new Scottish aggregates tax regime.

I am happy to take questions, convener.

:No, not that I am aware of, but I will ask my officials to say whether there has been any feedback on that.

:Oh, you are asking about that provision. Yes, it is so that, in a case where there are questions or where Revenue Scotland wants to verify what is happening with regard to that movement, it would have the power to do that, as you would expect.