Compliance
The Scottish budget – workplace parking and tourist tax
Justine Riccomini, head of taxation Sc FFTAAIPACharteredMCIPDChFCIPP at Institute of CharteredAccountants of Scotland (ICAS) explains announcements in the Scottish budget statement relating to theworkplace parking levy (WPL) and transient visitor levy (TVL)
Key points ● the tourist tax and WPL measures dormant since the start of Covid-19 are being rejuvenated ● the TVL needs further work, but this will resume in early 2022 ● secondary legislation on the WPL will be introduced ‘imminently’. Background Back in 2018, Donald Drysdale reported that the City of Edinburgh Council had won the support of all Scottish local authorities to seek powers to raise a tourist tax. At the time of writing, the United Kingdom was one of only nine European Union member states not charging a tourist tax, according to the Convention of Scottish Local Authorities, which published a paper that can be found here: http:// ow.ly/vc2430sa27m. It also announced its support for a tax that could be introduced locally in June 2018 with its #stayalittlepayalittle strapline. Following that, in September 2019, a consultation was issued by the Scottish government, outlining proposals for the introduction of a local discretionary TVL. A response to this was published by the Scottish government in March 2020; however, any plans to proceed were shelved due to the pandemic. The consultation and the associated government response can be located here: http://ow.ly/EjsA30sa2BP and http:// ow.ly/yxrL30sa2C2. The Transport (Scotland) Act 2019 part 7 introduced a discretionary power to charge the WPL. It indicated local authorities could work individually or collectively to impose the WPL on employers providing car parking spaces free of charge to employees within
to develop legislation that would give councils the discretionary power to apply an overnight visitor levy and undertake further stakeholder engagement as we consider the next steps.” Different kinds of ‘devolved taxes’ – getting the mix right In the report, ‘ Building a Better Tax System ’, there is discussion about the different powers available to the Scottish government to raise taxes, and whether the right mix of tax powers exists to support the economic recovery. The report can be located here: http://ow.ly/NgXR30sag8m. While the Scottish government has the power to create new taxes in the form of local taxes, they are unlikely to be significant revenue-raisers. There’s also a power to introduce new, Scotland-wide taxes, but this would involve a longer lead time as they require the agreement of the UK Parliament. Conclusion It appears the Scottish government will proceed with the TVL and WPL, now the pandemic disruption is smoothing out, meaning national and local government can start resuming business as usual. Once relevant legislation has been passed, time will tell which local authorities will take up the powers and charge the levy. For those who decide to take them up, we will see whether a material difference is made to fund tourist-related expenses and workplace commuting methods, traffic levels and parking solutions from the additional income generated (the revenue is intended to be ring-fenced for those purposes). In respect of the WPL, it will be interesting to review whether driver behaviours change at all if the levy is passed on to them by their employers. n
that local authority area. In June 2021, a consultation on WPL was issued by Transport Scotland concerning regulations and guidance. See here for further information: http://ow.ly/PeRF30sa2F2. The WPL would work with the local authority acting as a licence issuer. Employers would be issued with a licence, for which they would pay an annual fee based on a charge per qualifying space. It would be the employer’s decision whether to pass that cost on to employees. Hospices, National Health Service properties, doctor’s surgeries and disabled spaces would potentially be exempt. There were discussions around whether car parking for electric vehicles would also be exempt. 2021 announcements Following inevitable delays due to Covid-19, in the announcements on 9 December 2021, the Scottish budget documents confirmed the Scottish government will introduce secondary legislation on a WPL imminently. This would enable local authorities to introduce such schemes from 2022, alongside their work on low emissions zones. It will also resume work on the TVL proposal. National and local governments will work together to formulate, and agree, a fiscal framework for collecting, administering and distribution of the receipts. The resumption of work on the TVL (or tourist tax) was also mentioned in the Framework for Tax 2021 document at page 20: “The Scottish government very much recognises the overall impact of the pandemic on the tourism and hospitality sector in Scotland. We will, therefore, carefully review the work paused at the onset of the pandemic
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| Professional in Payroll, Pensions and Reward |
Issue 78 | March 2022
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