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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 22 July 2025
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Displaying 3298 contributions

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Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

We have gone over our time allocation. I think that some members of the committee still have questions, but we will follow them up in writing if you are willing to answer questions on that basis and if that is acceptable to the committee members who still have questions to put to you, including Graham Simpson.

Thank you for the evidence that you have given us this morning. It has been illuminating. We know that, at points, you have been challenged by the committee, and we thank you for your honesty in your responses to that. We have other work that we may need to do. In previous years, we have, in turn, invited the Scottish Government and HMRC to give evidence. The committee will consider how useful that would be on this occasion.

I thank Gareth Davies and Rebecca Mavin for their attendance and their evidence. Auditor General and Mark Taylor, I thank you as well. With that, I will draw the public part of this morning’s proceedings to a close.

10:18 Meeting continued in private until 11:34.  

Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

I will move things swiftly along and invite Willie Coffey to ask some questions.

Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

I have a very quick question, which relates to this thing about third-party data checks to get assurance. The report says:

“1.4 million records (27.0% of records analysed) could not be corroborated by comparison with the third-party data.”

That seems to me to be quite a high number. Do you have any concerns about that, Mr Davies?

Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

Thank you very much, indeed. The committee will be particularly interested in looking at the methodological approaches and the implications of greater divergence between the income tax systems of Scotland and the rest of the UK. Perhaps I could begin by putting an important question to you.

On the one hand, you say that HMRC estimates are reasonable, but, in paragraph 1.21 of the NAO report, you identify areas of methodology in which there is a degree of what we could call woolliness. You say:

“HMRC does not fully understand the causes of the over-estimate in 2021-22 and any socioeconomic factors contributing to the over-estimate may be different in 2022-23.”

You say that there is a big reliance on sample data in the revenue estimates and that pay as you earn and self-assessment amounts that are apportioned to Scotland do

“not reflect the differing proportions of each type of taxpayer between Scotland and the rest of the UK.”

I wrote to you last year about that, and I might return to it.

You say that PAYE assessments include areas that are not subject to Scottish income tax variation, such as dividend payments, savings interest and so on, and you note that assumptions are the basis of HMRC’s estimates of PAYE liabilities. Those are all holes in the methodology that you have identified. How does that provide you with the comfort to be able to say that what we have before us is reasonable?

Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

We have made the point in previous years that it is important for parliamentarians to understand what is going on out there, because, in the end, that guides policy decisions and decisions around the Scottish budget and where income tax is set. That is why we are especially interested. I would be interested to hear from you about what you would do differently if you were in the shoes of HMRC.

Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

To conclude that part of our questioning, are you saying that there is no figure or estimate for tax evasion or avoidance in Scotland?

Public Audit Committee

Administration of Scottish Income Tax 2022-23

Meeting date: 22 February 2024

Richard Leonard

Thank you. That is helpful.

I will move things along by bringing in Graham Simpson, who joins us remotely.

Public Audit Committee

Interests

Meeting date: 22 February 2024

Richard Leonard

Good morning. I welcome everyone to the sixth meeting in 2024 of the Public Audit Committee.

Before I turn to the agenda, I place on record my thanks for the contribution that has been made to the committee by Sharon Dowey, who stepped down last week as deputy convener of the Public Audit Committee. She was a highly valued member of the team, and I valued her greatly as deputy convener.

Under the first item on the agenda, I welcome Jamie Greene and invite him to declare any relevant interests.

Public Audit Committee

Deputy Convener

Meeting date: 22 February 2024

Richard Leonard

Under the second item, the committee must agree a new deputy convener. The Parliament has agreed that only members of the Scottish Conservative and Unionist Party are eligible to be chosen as deputy convener of the Public Audit Committee, and I understand that the party has nominated Jamie Greene for the role. Do members agree to the nomination of Jamie Greene as deputy convener?

Members indicated agreement.

Public Audit Committee

Deputy Convener

Meeting date: 22 February 2024

Richard Leonard

Thank you very much. I congratulate you on your appointment, Jamie. I look forward very much to working with you.