“Framework for auditing the Scottish rate of income tax”
For item 3, members have responses from Her Majesty’s Revenue and Customs, the National Audit Office, the Scottish Government and the Auditor General on the committee’s report “Framework for auditing the Scottish rate of income tax”. Do members have any comments or questions?
I have a general comment. There are still an awful lot of gaps in the information. For example, the second paragraph on page 4 of paper 3 says:
“The details of the proposed enforcement and compliance regime are being developed further by HMRC”.
There are gaps in the assurances that we are being given and there are questions about Audit Scotland’s involvement and how it could be made more effective. There is a lot of exploring still to do to ensure that the committee is properly involved in the process. We will need to return to the issue. Given that the implementation of SRIT is still a couple of years off, perhaps we could do so in a year’s time.
Yes. You will have noted that the first annual audit reports by the NAO and HRMC will be considered by the committee in mid-2015. The paper says that the first NAO report on the implementation of the Scottish rate of income tax will be laid before the Scottish Parliament in the summer of 2015. That gives us the opportunity to return to and consider the matter in more detail. The question is whether at this stage committee members want to do anything other than note the submissions in paper 3.
I have a similar comment. The Government’s response is fine, except that detail is lacking. I do not know whether we will get any of the detail before next year. I refer members to page 6 of paper 3. In response to the committee’s comment in its report about including
“any proposed use of the cash reserve ... within the annual budget document”,
John Swinney says:
“We can confirm that the principle of these recommendations will be accommodated by the Scottish Government, and that the practical arrangements for doing so are currently being discussed.”
Although I am pleased that the cabinet secretary agrees with the principle, we want to know about the practical arrangements. Will we get the detail before the NAO report is published in summer 2015? I would have thought that members would want the detail.
We could ask the Scottish Government whether it has any plans to provide more detail ahead of the publication of the report. As the paper suggests, we will have the opportunity to return to the issue next year.
Yes.
Our report says:
“The Committee would welcome clarification from the Scottish Government of how it intends to assess the effectiveness of HMRC’s compliance activities in relation the SRIT.”
That clarification matters as much to the Scottish Government as it does to us. As far as I can see, the Government will not do anything other than ask HRMC for information, monitor it and rely on the National Audit Office. I want clarification on whether the Scottish Government is commissioning any other work or whether it is relying on on-going relations between HRMC and Government officials.
Next year both the Scottish Government and the committee will have the opportunity to look in more detail at the matter when the reports are laid. As part of that scrutiny, we can ask about any on-going work. However, next year will be the key stage ahead of implementation in 2016.
Do members agree to note the correspondence and seek further clarification from the Scottish Government?
Members indicated agreement.
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