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Seòmar agus comataidhean

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 8 August 2025
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Displaying 893 contributions

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Public Audit Committee

Section 23 Report: “How the Scottish Government is set to deliver climate change goals”

Meeting date: 18 May 2023

Craig Hoy

The term “just transition” is now commonly used, although I would venture to suggest that it is not commonly understood in all quarters. What checks are in place to ensure that net zero targets are met in a way that is fair to all, so that it truly is a just transition? For example, in the national economic interest and the national security interest, the UK spent £40 billion last year on oil and gas from Norway. Would it be right to have broader concerns that winding down Scotland’s oil and gas sector would have an impact in that the transition would not necessarily be fair for all?

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

I know that you have tax design in your job title; in terms of tax design, that is a pretty clear piece of the jigsaw that you would build into the tax system.

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

What are the emerging trends, and what is the emerging evidence telling you about behavioural patterns in Scotland? Is it too early to capture anything, or can we see that, for example, people are not taking promotions or doing the extra shift because the rate of tax is discouraging them?

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

I put those scenarios to you because behavioural and working patterns have changed dramatically since Covid. People no longer have to live near their work, and remote working is far more common than it was. To what extent are you or either Government looking at the impact of remote working in relation to the operation of the tax system?

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

Thank you for the clarification.

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

Is it fair to say that the greater the divergence, the greater the risk is that people’s behavioural patterns will start to change?

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

The discussion around the impact of the changes and whether it is sensible to have very divergent tax rates is, in effect, a matter for ministers. Alyson Stafford, do you want to comment on what work is being undertaken? We might find out about the problem only once it is too late—once too many upper rate taxpayers have moved or too many individuals are incorporated and, therefore, all the tax receipts are going to the UK Government rather than the Scottish Government. What work is being done to ensure that we are alert to the fact that we do not come to the issue once it is too late and has already had a material impact on tax receipts in Scotland?

10:30  

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

If you do not mind, I am going to crunch into reverse and go back to the issue of behavioural patterns, because there were some figures that I could not locate earlier, but I have found them now. A report that HMRC produced said that, for those in the upper-rate tax band—those who earn £150,000—a 1 per cent reduction in the percentage of income retained after tax leads to a reduction in income declared of between 0.52 and 0.77 per cent. The report made it quite clear that that was down not to non-compliance but to behavioural change. Does that not show that we already have empirical evidence that suggests that such tax increases will lead to behavioural change? Who should advise ministers about that—should it be HMRC, the Scottish Exchequer or the Scottish Fiscal Commission? Those figures seem pretty clear to me.

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

Is there a risk that there is a lag, and that public policy is continuing to move in a more progressive direction, towards higher tax, when the impact of that will not be felt until two or three years after any fiscal change takes place?

Public Audit Committee

“Administration of Scottish income tax 2021/22”

Meeting date: 11 May 2023

Craig Hoy

If I was the chief executive of a Scottish bank but lived in London, commuted up from London and stayed in a hotel five days a week, even though I was spending more time in Scotland than in England, I would still be resident in England. Is that correct?