The Tied Pubs (Fees and Financial Penalties) (Scotland) Regulations 2024

Permitted maximum penalty

4.—(1) The permitted maximum penalty that the adjudicator may impose on a pub-owning business under section 9 of the Act is 1% of the pub-owning business’s annual turnover.

(2) Where a pub-owning business is part of a group undertaking, the permitted maximum penalty is 1% of the combined annual turnover of the pub-owning business and any person who is a group undertaking in relation to the pub-owning business.

(3) For the purposes of this regulation, the annual turnover of a business or undertaking is to be determined in accordance with paragraphs (4) and (5).

(4) Where a business or undertaking has published accounts during the period of 12 months immediately preceding the date on which the financial penalty is imposed, the annual turnover is—

(a) where the accounts cover a period of exactly 12 months, the relevant turnover for the period covered by those accounts, or

(b) where the accounts cover a period of more than or less than 12 months, the relevant turnover for the period covered by the accounts, divided by the number of months in that period, and multiplied by 12.

(5) Where accounts have not been published as mentioned in paragraph (4), the annual turnover is—

(a) where there is relevant turnover for each of the 12 months ending with the month preceding that in which the financial penalty is imposed, the relevant turnover for those 12 months,

(b) where there is relevant turnover for some but not all of those 12 months, the relevant turnover for those months, divided by the number of those months, and multiplied by 12, or

(c) where there is no relevant turnover for any of those 12 months, nil.

(6) “Relevant turnover” for any period is all income receivable by a business or undertaking in that period that is—

(a) derived from the provision of products and services falling within the ordinary activities of the business or undertaking in the United Kingdom,

(b) rent or money payable in lieu of rent, in respect of land in the United Kingdom, or

(c) gifts, grants, subsidies or membership fees receivable in the course of the ordinary activities of the business or undertaking in the United Kingdom,

after deduction of trade discounts, value added tax and other taxes based on that income.

(7) Amounts are to be calculated for the purposes of this regulation in conformity with generally accepted accounting principles and practices.