Delegated Powers and Law Reform Committee

Meeting date: Tuesday, January 31, 2017

Official Report 339KB pdf

Air Departure Tax (Scotland) Bill: Stage 1

The next item is consideration of the delegated powers in the Air Departure Tax (Scotland) Bill. The bill makes provision for an air departure tax, which is to be charged on the carriage of chargeable passengers on chargeable aircraft by air from airports in Scotland. Eight sections of the bill confer delegated powers, two of which are standard ancillary and commencement powers. However, we may wish to ask questions on four of the powers as provided for in sections 7, 8 ,10 and 34.

Section 7 defines standard class travel for the purposes of the bill, which includes consideration of the size of the seat pitch for a passenger’s seat. Subsection (2) defines seat pitch with reference to the distance between the passenger’s seat and the seat that is immediately in front of or behind it. If there is no seat immediately in front of or behind the relevant seat, the seat pitch is to be determined with regard to any guidance issued by Revenue Scotland.

Does the committee agree to ask the Scottish Government why it considers it appropriate for provision regarding the definition of seat pitch to be made in guidance issued by Revenue Scotland, as opposed to being contained in subordinate legislation? Does the committee also agree to ask the Scottish Government to indicate the type of provision that it is expected that Revenue Scotland might make in exercise of the power?

Members indicated agreement.

Section 7(3) provides that

“Whether a class of travel is the only, or the most basic, class of travel available on a flight is to be determined with regard to any guidance issued by Revenue Scotland”.

Does the committee agree to ask the Scottish Government why it considers it appropriate for provision regarding determination of the class of travel to be made in guidance issued by Revenue Scotland, as opposed to being contained in subordinate legislation? Does the committee also agree to ask the Scottish Government to indicate the type of provision that it is expected that Revenue Scotland might make in exercise of the power?

Members indicated agreement.

Section 8(1) confers power on the Scottish ministers to make provision concerning who a chargeable passenger is, who a non-chargeable passenger is, which aircraft are chargeable aircraft and which aircraft are non-chargeable aircraft. The terms “chargeable passenger” and “chargeable aircraft” are defined in sections 2 and 3. Accordingly, the power enables ministers to amend the definitions in the bill by regulations and to create definitions of “non-chargeable passenger” and “non-chargeable aircraft”. Subsection (2) provides that regulations made under section 8 may add, change or remove any exemption from being a chargeable passenger or chargeable aircraft and may also add, change or remove any provision that defines or otherwise explains a term or definition in the bill.

As the Government acknowledges in its delegated powers memorandum, the concepts of the chargeable passenger and chargeable aircraft are key to determining the basis on which liability for ADT will arise. Does the committee therefore agree to ask the Government why it is considered appropriate in section 8(1) to take a power to make provision concerning who a non-chargeable passenger is and which aircraft are non-chargeable aircraft and to create exemptions from being a chargeable passenger or chargeable aircraft, rather than to make provision for such matters in the bill?

Members indicated agreement.

Section 10(2) enables the Scottish ministers, by regulations, to

“make other provision concerning the structure of the tax”—

that is, provision other than defining tax bands and setting the amount of tax for each tax rate as required by section 10(1). Does the committee agree to ask the Scottish Government to explain how the power in section 10(2) is intended to be used and why it is considered to be an appropriate delegation of power?

Members indicated agreement.

The power that is proposed in section 34(1) would enable the Scottish ministers to change any provision in the bill, once enacted, that concerns the payment, collection and management of ADT, other than a provision that sets out the circumstances that give rise to liability for the tax. That is a wide power to modify the detailed provisions on payment, collection and management that appear in the bill. The delegated powers memorandum states that

“Once ADT is in operation it may be necessary to make changes to how the tax is administered, for example in light of Revenue Scotland’s operational experience of collecting and managing the tax”.

Does the committee agree to ask the Scottish Government to provide further justification for taking such a wide power to alter the detailed machinery that has been set out in the bill? Does the committee also agree to ask for examples of the changes that might be made in exercise of the power?

Members indicated agreement.