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Scotland To Ensure Efficient Collection Of New Taxes

by Robert Lee, Tax-News.com, London

18 December 2014


Auditors have warned that delays in hiring staff and procuring an IT system have increased the risk that new property taxes will not be effectively managed when they are devolved to Scotland next April.

In a new report, Audit Scotland examined the Scottish Government's progress in preparing for the implementation of the Scotland Act 2012. The Act will introduce a Land and Buildings Transaction Tax (replacing the current UK stamp duty arrangements, as they apply to Scotland) and the Scottish Landfill Tax from April 1, 2015. Legislation passed by the Scottish Parliament last August established Revenue Scotland as the tax authority and placed it in charge of the new taxes.

In its report, Audit Scotland acknowledged that the Scottish Government has established clear structures for managing the set-up of the new tax authority and that there are now well-developed plans in place for implementing the devolved taxes. However, it also expressed concern that there have been delays in putting the required staff in place and in procuring the IT system needed to collect and administer the taxes.

As a result, there is an increased risk that the IT system may not be fully functioning by April 1, 2015, and that Revenue Scotland will not have the required operational expertise in place. This could mean that tax payments take longer to process and that the cost of collection increases, Audit Scotland said.

The report recommended that Revenue Scotland closely monitor the development of its IT system, along with the recruitment of the team that will oversee it. This should allow it to decide whether to implement contingency plans to help ensure effective tax collection from April 1.

Caroline Gardner, Auditor General for Scotland, said, "The implementation of the Scotland Act 2012 is a large and complex task that will change the landscape for public finances in Scotland, increasing fiscal autonomy and strengthening the accountability of the Scottish Parliament. The Scottish Government successfully developed the legislative framework for the devolved taxes, but it must ensure that staff and systems are fully in place to manage the increased responsibilities that the Scotland Act brings."

Reacting to the report, Scotland's First Minister, Nicola Sturgeon, moved to assure Parliament that taxes will begin to be collected on April 1 and that Revenue Scotland is "on track." She told lawmakers that, together with the Finance Secretary, she will closely monitor progress, and is "satisfied that all the steps that should be taken at the moment are being taken."

TAGS: Finance | tax | property tax | government committee | law | United Kingdom | tax authority | stamp duty | tax reform | Tax | Scotland

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