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All Official Reports of meetings in the Debating Chamber of the Scottish Parliament.
All Official Reports of public meetings of committees.
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Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
Okay. Obviously, we will await that response with interest.
I want to go back to something that Alyson Stafford said. As I understand the process, amendments to the Scotland Act 1998 provided for the setting of a Scottish rate of income tax from April 2017 onwards. HMRC collects and administers Scottish income tax, HMRC’s accounts are audited by the National Audit Office, and the Comptroller and Auditor General is required to report to the Scottish Parliament on HMRC’s administration of Scottish income tax. His seventh report on Scottish income tax was laid in Parliament on 14 January 2022. However, you told us earlier that you do not take any account of the NAO’s estimates of Scottish income tax. Why do you ignore that important body of evidence and rely solely on the Scottish Fiscal Commission’s estimates?
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
Okay. Maybe as DG for the Scottish exchequer, you could write to let the committee know what are the sources that are used.
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
Yes.
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
I will pick up on that contemporaneous point before I come to my final question. Around the time of the UK spring budget statement, the Office for Budget Responsibility produced an assessment in which it suggested that there might be some buoyancy—a euphemism for an increase—in tax receipts, as a result of the rise in inflation. I presume that that assessment was based on wage and salary demands and rises perhaps going up at a higher rate than they have been for the past decade as a result of the fuelling impact of price inflation. My question is first to Jonathan Athow. Are you seeing any impacts from that rising inflation in your tax collection levels?
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
My next question is for Alyson Stafford and Fiona Thom. Figure 9 in the NAO report shows where there is most divergence in tax paid by earnings. Those who are on around £50,000 in Scotland pay higher income tax than those in other parts of the UK. In light of that and of what Jonathan Athow has just said, is the Scottish exchequer monitoring the situation? Do you have any sense that tax receipts might be going up, and do you have any plans for how they might be spent if they go up?
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
My final question is on a much more mundane and less exciting issue, but one that is very important to us: the service level agreement between the Scottish Government and HMRC. You will have seen that, in the evidence session on 3 February, we explored with Gareth Davies and Stephen Boyle how the agreement currently works and whether it could be improved. I suppose that my question is really about what consideration has been given to the existing terms of the service level agreement and whether it can be improved and cover things such as the tax gap in Scotland, for example.
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
You can comment without prejudice, if you like, Jonathan.
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
One of our questions and interests is whether it is the case that the data does not exist or is impenetrable, or whether we could get the wider data set that we think is necessary if the Scottish Government paid more than £700,000 a year for it.
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
In our previous session on the issue, Colin Beattie went into some detail on one aspect of the report, and he is keen to get back into that level of detail on that aspect, so I invite him to put some questions.
Public Audit Committee
“Administration of Scottish income tax 2020/21”
Meeting date: 12 May 2022
Richard Leonard
Could you tell us when you will officially respond to that Public Accounts Committee report?
