I reconvene the meeting, folks, but first of all I give apologies on behalf of Michael McMahon. As convener of the Welfare Reform Committee, he has had to go downstairs to meet a group of people with mental health issues who are coming to his committee next week, and show them the committee room. He will probably join us again in 15 or 20 minutes.
Agenda item 2 is an evidence-taking session on devolved taxes implementation with Eleanor Emberson, who is the head of Revenue Scotland at the Scottish Government; John King, who is the director of registration at Registers of Scotland; and John Kenny, who is the head of national operations at the Scottish Environment Protection Agency. As members have received copies of the most recent progress update from our witnesses, we will go straight to questions. The witnesses are all veterans of the committee, so they know the drill, so to speak.
I will start off with a question for Eleanor Emberson. In your update report, you say that the most recent estimate for the total cost of the set-up and first five years of operation is £21.2 million, but that figure excludes an estimated £730,000 for the costs of the Scottish tax tribunal, which were included in the financial memorandum to the Revenue Scotland and Tax Powers Bill and Revenue Scotland’s previous progress report. Why have those costs been excluded as a quite separate issue, given that they were not excluded before, and why has there been a quite significant 9 per cent increase in the costs of establishing and running the system for the devolved taxes?
The costs of the tax tribunal were properly included in the Revenue Scotland and Tax Powers Bill’s financial memorandum because they were relevant to that legislation, but I have excluded them this time round because of the comparison with the £22.3 million estimate that was made by Her Majesty’s Revenue and Customs. HMRC’s figure would never have covered the costs of the tax tribunal, whatever had been done about it, but in hindsight we could probably have made that clearer at the time of the financial memorandum. They are not costs that HMRC would have borne, and they are not costs that Revenue Scotland bears. They are costs that are associated with running the taxes, which is why they were properly part of the bill’s financial memorandum, but they are not among the costs that we like to add up and compare with the original HMRC estimate of £22.3 million.
As for the increase in costs, I can answer more questions about the detail, but as I have broadly explained in my update report, the increase is almost exclusively due to additional staff costs associated with implementation. Those staff fall into three broad groups. First, there are programme and project management staff, which we bolstered in response to gateway review recommendations and, indeed, to our own need to manage the programme and project very tightly through the past nine or 10 months of implementation work.
Secondly, we have additional business analysts working between the process design and our IT contractor. As you know, there have been problems with past Government IT projects. Things can overrun or might not deliver as required, so we have put in additional business analysts to ensure that as we go through every iteration of the IT system, we are completely on top of things, are managing the project very tightly and are ensuring that it delivers what it needs to deliver and stays within budget.
Thirdly, I have put in additional staff to make quite sure that we deliver all the different aspects of set-up in time for April. In short, the increase is to do with set-up costs associated with staff.
11:15
As you have said in your update,
“increased investment in staff costs for implementation”
Is “now falling in 2015-16”, and you have made it clear that most of the additional costs are associated with staff. However, your report does not contain a breakdown of that.
You talked about managing things “very tightly”, but there seems to be quite a divergence in the number of staff that will be required. The report says that the anticipated number of staff is 41 in the first year of live operation, whereas the bill’s financial memorandum estimated 30 staff. You have said that the staff are for
“additional capacity in the critical early months”
but, again, no detailed estimates have been provided.
If it would help the committee, I could send you a staffing structure that shows who the 41 staff are and what they will be doing.
Yes.
I am very happy to send that in, if you will find it useful.
The bill’s financial memorandum mentions 30 staff, but we have made additional investment in compliance, which will require three staff members. We are probably talking about a difference of eight posts between what we said in the financial memorandum and what we are saying now, and that is our best estimate of what we need to ensure that we can do this safely and reliably and that we can deliver the service and get the money in the door.
How likely is it that the figures will change again in the months ahead?
I do not expect to recruit beyond 41 staff members. We have a plan for staffing up with 41; 12 of those people have already been identified, another nine are being interviewed in the next two weeks and a further tranche will come behind that. That is what we are going to go live with. I cannot speak for what changes might be made in future years, particularly once we have a board and some experience of live running, but that is the structure that we will be working with for the foreseeable future.
Is your structure flexible enough to deal with any additional powers that might be devolved to Scotland?
We recognise that we might need to respond to that. Of course, the response would depend entirely on what the additional powers might be. If they involve further small or transaction based taxes, we will have a good platform to build on, but I expect that if any significant extra power were to be devolved we would need more staff and more implementation work. That is just the nature of what we do.
Okay.
The financial memorandum to the bill states:
“The intention is for Revenue Scotland to delegate operational responsibility for the collection of Scottish Landfill Tax to SEPA”,
but in its latest progress report SEPA says that it has been agreed that it
“will not collect tax data or process any SLfT ... transactions on behalf of Revenue Scotland.”
Why has the approach to the Scottish landfill tax been changed?
I will respond first and then invite John Kenny to come in.
When we last came before the committee, we explained the IT system change. I will have to go a long way back in the development, but the financial memorandum for the Revenue Scotland and Tax Powers Bill included new additional investment in an IT system for Revenue Scotland. That was based on the detailed work that we had done on the business analysis and the IT requirements, which highlighted that a more efficient and robust way of delivering the online system for collection of landfill tax and land and buildings transaction tax would be to develop a system at Revenue Scotland that was integrated appropriately with systems at SEPA and Registers of Scotland, rather than have separate systems at SEPA and ROS with nothing in the middle. That means that SEPA will not have a particularly significant up-front collection role, because people will make their returns, which will be processed by Revenue Scotland. We will handle all the payments and we will store the taxpayer data.
However, SEPA will have a very significant role in two areas, the biggest of which will be compliance, which will involve ensuring that taxpayers are paying the correct amount of tax, tackling the illegal dumping problem and trying to recover tax from people who have been dumping illegally. The other role that SEPA will have is in information. SEPA has staff who go out to landfill sites who are bound to be asked questions about tax, among other things, so they will be able to help us to spread the word. They are already helping us to work with landfill operators to make sure that the process goes as smoothly as it can. John Kenny might like to add to that.
There was recognition that the IT system change would result in more efficient delivery across the taxes involved, and that it would be better for Revenue Scotland to be the holder of those sensitive data in their entirety. That is the reason for the change.
It is just that the revised set of running costs has not been included in the figures that have been provided to the committee. Those figures have been agreed with Revenue Scotland, but we have not received them.
I can tell you what the revised costs are. The set-up costs have been reduced by £250,000 on the back of that IT change.
What about the running costs?
The main cost was setting up the information system. The running costs have come down a little from about £610,000 to just under £600,000.
Thank you.
Registers of Scotland finances itself from the income that it receives for the services that it provides. The costs that it incurs in relation to LBTT will be met by the Government. The RSTP bill financial memorandum estimated that ROS would face set-up costs of £335,000 and running costs over the first five years of £1.625 million. Have those estimates changed?
We have been reviewing our estimates every month. We still envisage that the set-up costs will be in the region of £335,000; they will certainly be no more than that. Within that figure, there has been some reallocation of individual components. For example, the IT costs have come down from £85,000 to £70,000.
Our spend to date is in the region of £176,000. We anticipate that by the time we get to the end of March, which is when we go live, our spend will be between £300,000 and a maximum of £335,000. In the next four to six weeks, we will have a very high degree of certainty about what that end spend will be. It will depend on our refining what we will deliver, particularly on the IT side, along with Revenue Scotland’s IT provider.
I have two questions for Eleanor Emberson. In your submission, you say that the tax gap for LBTT could be around £4.5 million a year. You also say that you plan to make an additional investment in tax compliance of £230,000, which you say will be
“aimed at reducing the expected tax gap.”
What is the current gap for stamp duty land tax? By how much do you expect to reduce the tax gap with the investment of £230,000?
I apologise because I do not have the figures for the SDLT gap in front of me. We looked into that when we did the financial memorandum for the Revenue Scotland and Tax Powers Bill. I do not have the figure in my head. We took the SDLT estimate and reduced it somewhat as an estimate for LBTT because we recognised that the legislation that Parliament had passed for LBTT already attempted to close loopholes and routes for avoidance.
We have not attempted to estimate by how much we can close the gap. There was a £230,000 estimate for additional investment in compliance work. My latest estimate for that is actually £259,000, which consists of £165,000 for three staff at Revenue Scotland and £94,000 for staff at SEPA, so it is across the two taxes.
The three staff at Revenue Scotland will be focused mostly on land and buildings transaction tax. Our aim is that those staff will pay for themselves several times over. We will monitor over time how much we bring in through the additional compliance activity. That will allow the committee to understand something about how successful we are.
We simply do not have detailed information about the tax gap. We do not have a track record with the brand-new tax on which we could make a robust estimate of how much we expect to close the tax gap. Therefore, we have said that we understand what it will cost us and will monitor closely what comes in. We will report that to the committee as we go along.
Okay. I understand that the stamp duty land tax is £9 million at present.
Sorry?
The gap is £9 million.
Do you mean in Scotland?
Yes—in Scotland. Therefore, if your update says that the gap will be £4.5 million, you estimate that the introduction of LBTT will reduce the gap by some 50 per cent.
I have to say that that is an estimate.
Of course. We appreciate that.
We really do not know. I am concerned not to mislead the committee by trying to give you figures about what we might bring in that look accurate and confident, because until we collect the tax we do not know how successful we will be.
That is something that the committee will consider as we go forward.
I have one or two more questions, but I might leave them until the end and see whether my colleagues cover them.
Good morning. As with many reports that are given to the committee and on which witnesses then appear before us, there is a slight time gap: your reports are all from October. Given the tight timescale that we now have, has anything material changed for any of your organisations since you submitted the reports in October?
There has been a lot of progress but there is nothing negative that I need to report. We are still on track on all the areas and quite a number of things have happened since early October. We now have draft technical guidance out for consultation, our website is live and we have seen further demonstrations of IT, so a lot of progress has been made since then.
I echo that. The committee has previously asked about the division of roles and responsibilities between ROS and Revenue Scotland. At ROS, we are now clear what our role is, which is helping us to refine the detail of our operational activity post 1 April.
When you appeared before the committee previously, alongside a written report you submitted what might be called a dashboard that used a system of green, amber and red lights, which is a project management tool. Lots of things were green and there was the occasional amber—I do not think that you had many reds. In any of your organisations, does any part of the project have an amber or red light at this stage that ought to be flagged up? Is there anything that could hold progress back for any of your organisations between now and the start of April?
11:30
The answer has to be yes—of course things could happen between now and April that would hold us back. We are using the green-amber-red system. We have been working to readiness criteria, which is a series of descriptions of where we need to be, and we mark green, amber or red against every single one of those. We report that weekly. We have had small numbers of amber indicators out of two dozen or so criteria and we have been working hard to turn some of them back to green.
We are doing an assessment this week so that we will know, when we do another full assessment at the end of January, where we were on readiness at the end of November. We are still on track. Amber indicates that something is not exactly as per our plan, but we have a way of bringing it back. If we thought that we did not have a way of bringing it back, it would be red, and at that point, the warning lights would go on and we would intervene. We have nothing at red.
So, across the three organisations, things could go wrong and things could happen, but for each of your organisations, there is nothing at red that is likely to hold things back.
We are clear about what Registers of Scotland has to deliver; all aspects of that are standing at green. The main IT component that we have to deliver is already in place. The remaining IT is more behind the scenes and we are aware of what has to be delivered there. ROS is confident that we have everything in place that will support effective delivery.
SEPA’s answer is similar to Eleanor Emberson’s. Across the board, a number of individual parts of the projects are at amber, which means that we expect to deliver them but there are challenges. The majority of them are green.
Without being involved in the projects, the ones that strike an outsider like me as being the riskiest, as with many projects, are the IT systems. If the IT systems function, we can probably get over most hurdles. If they do not, there is an immediate issue.
I got the impression from John King that the IT system is almost complete. Could each of you assure the committee that the IT system is being tested robustly and that there is a contingency plan in case something goes wrong on day 1, which would not get us off to a great start?
I will clarify what I said about the IT system. I was referring to one component that ROS had agreed to deliver because we were building it for our own IT system. It is an authentication server that is a way of validating users to a system. We are sharing that with Revenue Scotland. The system has already been delivered and tested, and it is available for Revenue Scotland’s IT team to use.
It might be more appropriate for Eleanor Emberson to comment on more general IT.
I can give the committee an absolute assurance that everything is being thoroughly tested. There are various components to the full system; I am not a technical expert, so I will just describe them in plain language, although there are proper technical descriptions.
There is an electronic form that captures all the data; it is not static, but it responds to the user. For example, if you tick certain boxes, it does not ask certain questions. There is a case-management system, which is what Revenue Scotland uses for individual tax cases. It is used for stages when there is a return or a payment but can be used if there is a dispute or inquiry. There is a set of links and something that looks out to solicitors for LBTT and landfill operators for landfill tax so that someone who is not within Revenue Scotland or SEPA can interact with the system. We intend to deliver all that—tested—by the end of January.
It is our intention to do in February and March what I, as a layperson, would describe as snagging: making absolutely sure that there are no little glitches.
The electronic form part is starting its testing imminently, and the case-management system and so on will follow behind, all through December. The outward-facing part will be tested in January. Most of the work for all of that is already done, and we are now stitching everything together.
A further thing that must happen at the end is full security testing and full security accreditation, to make absolutely sure that taxpayer data will be secure, and that nobody could do anything bad with any of our systems.
We are on track to deliver all of that, but Gavin Brown is absolutely right: of course we need a contingency plan in case any element fails when we get to testing, or if we do not get security accreditation. Our contingency plan is based on paper returns, because we will continue to offer paper returns as an option. Solicitors were not all keen to move fully online. We might, in time, wish to move fully online.
However, it would have been too big an ask to tell people that we were going to compel them to use an IT system that they had never seen, which I cannot prove works and which I cannot prove will be robust and good. We have agreed to offer a paper return, initially. For our contingency plan, we would, if we had to, do fully paper returns. We have prioritised the order in which we have built the IT system in order to ensure that, if we have to do the paper returns, we will have all the behind-the-scenes parts of the system for processing them. We are as robust as we can be. We have mapped out the staffing requirement for doing the paper return and so on.
That was helpful—thank you.
The convener asked about staff numbers. He spoke about having 30 staff under the initial bill; I think that the current complement is 41. One of the reasons that was given in your report was that you wanted to have an extra complement for year 1, potentially, to ensure that the operation would be a success. Based on current plans, is that total of 41 simply for year 1? Might that number reduce over time? I suppose that it depends on what other responsibilities come your way. Is 41 likely to be more of a medium-term figure?
It is probably more medium term. Judging from the run of estimates that I have in front of me, the number would probably come down by only a couple of posts or so in 2016-17. We would then do what we needed to do from that point on. We would have proper experience by then, of course, of how well things were working in operation. I have assumed that we would drop the figures that I have used in order to develop the estimate by only a couple of posts in 2016-17 and beyond.
My next question might be more for ministers, but you might be able to answer it. As far as Revenue Scotland is concerned, are we on track with all the subordinate legislation for the two devolved taxes?
My understanding is that the subordinate legislation will all appear in December. If that happens, that is fine from Revenue Scotland’s point of view.
I am still a little bit confused about the total costs—perhaps that is my failing—so I wonder whether you could clarify the matter. In the spring 2014 report, which I think was published in March, reference was again made to the £16.7 million quote from Revenue Scotland, compared with HMRC’s figure of £22.3 million. Revenue Scotland’s figure was 25 per cent less. A statement was made at the time:
“Our estimated costs for the basic collection of the taxes have not changed – they remain at £16.7m.”
The figure in the current report is £21.2 million. The report says on page 3:
“This total cost continues to compare favourably with the original estimate of £22.3m”.
That figure of £21.2 million is obviously an increase over the £16.7 million. If we had gone with HMRC’s figure of £22.3 million, would we have had the same increase? I have not worked it out, but it would be about £4 million extra. Is all of that extra costs, or is any of it simply an increase in the £16.7 million base figure?
The £1.7 million that I highlighted for the committee is effectively an overspend against the estimates in the March report. If we were trying to apportion it, about £1.46 million would be an overspend against the £16.7 million and the rest would be a slight overspend against the so-called additional costs. It is very difficult to know what HMRC’s estimate would be if you asked it now.
HMRC did an estimate way back in the summer of 2012, on the basis of the taxes being identical to the UK equivalents. If HMRC had been doing the development, it would also have had to respond to the fact that there are now differences between the Scottish and UK taxes. I have no idea what HMRC would quote at this point, but there is a good chance that its costs would also have gone up in response to the different design. I can only speculate, because we cannot know.
I accept that. As far as you are concerned, you and HMRC quoted on the same basis—as far as we are all aware.
Yes.
Are you saying that it is not that you did not quote correctly, but that as things have been developed, extra costs have come in and, as far as we know, they would probably have come in on the HMRC side, too?
As far as we can tell. The bulk of the additional cost is to do with ensuring that the systems match the design of the Scottish taxes. An element in this is that my estimates have not turned out to be completely accurate. I am being honest about that. We have had to put in additional resource to deliver. However, the bulk of the difference between £16.7 million and £21.2 million is to do with ensuring that the design of the systems matches the aspiration for Scotland.
I appreciate your straightforward answer, which certainly helps me to understand the situation. In the same area, it seems a little odd that we start a new tax and then immediately there is a tax gap. That would make some people think that Revenue Scotland was not doing its job properly, because surely there should not be a tax gap.
I would love to be in a world in which we legislate, people are required to pay and all that Revenue Scotland has to do is to provide the system for the money to flow in the door, but that is not the world that any of us expects to live in. Although the Parliament has tightened the legislation in relation to land and buildings transaction tax, and has given further powers, there will be an amount of testing, settling down and exploration of any grey areas and room to manoeuvre. We do not have a robust estimate of the tax gap; the £4.5 million quoted is the best that we could do.
I will not press you on that. I totally accept that that is uncertain.
It is not in the nature of tax that we simply put it out there, everybody pays it and there is nothing more to do.
I accept that and obviously HMRC accepts that, because it clearly identifies the issue—not just on this tax, but on all taxes—and tries to eat into it.
Did you want to say something, Mr Kenny?
Yes. I was going to mention the illegal waste sites for landfill that were not previously subject to tax under the UK landfill tax scheme. Those sites are illegal and therefore, by definition, we might not know where they are. We have come across individual sites that would have had a seven-figure tax liability. We know that it is there, and there is a gap, but it is difficult to quantify because the sites are illegal.
Although we found them under the past regime—they turned up every so often.
They turned up and we are confident that, with the resources that we have been given, we will be in a better position to identify them and bring them into the tax system. However, the result is very hard to quantify. We can say only that they are there and potentially large scale. The beauty of the new tax and system is that we can go after that tax, whereas we could not do that under the UK system.
11:45
Presumably, with any tax gap, you spend a bit more and you get quite a lot more tax in, or you spend a bit less and you do not get so much tax in. There is a balance there. How do you find the right balance?
You will judge us on our track record. Part of the reporting that we expect to have to do to the Parliament and the public is on how much money flowed in through the normal process of people doing their returns and making their payments, and how much money was perhaps collected as a result of further investigations by SEPA or Revenue Scotland on either of the taxes. That is probably the best measure of our effectiveness. You will understand how much we are spending on compliance and see how successful we are being.
I have to manage your expectations, in that you might not see that in the first six months because these things build up. We start the process of inquiry and then we start taking action against people. For the first two or three years of the operation of the taxes, you will start to see how successful we are being in bringing in that money. I imagine that that is one of the things that you will want to explore with us regularly.
I think that the figure for compliance was £230,000. Will you be able to identify how much tax you think that that has produced?
Over time.
Over time, yes.
That is fair enough.
The ROS submission talks about Registers of Scotland’s roles and responsibilities. They are quite clear, but I am not sure that I understand the fourth one. It says:
“We will have a role to play in the event that system contingency has to be invoked. The detail of this is being worked upon.”
What does that mean?
That one focuses around the front end of the tax collection system, so it is about what people would do in the event that there is a problem with the system and taxpayers are not able to submit returns online. We have been in discussion with Eleanor Emberson and her colleagues about the role that Registers of Scotland would have to play in simplifying the process for the taxpayer.
Eleanor Emberson mentioned that paper returns will still be an option, in general. Paper returns will be sent into Registers of Scotland, and we expect that they will come in along with paper applications for registration of the property transaction. They might come in in the one envelope. In the event of contingency, we are looking to extend that. If customers are used to sending paper returns to ROS, in a contingency situation they will continue to send a much greater volume of paper returns to ROS.
That is helpful. The word “contingency” is used in different ways by different people.
You say that you will be able, over time, to measure the impact of the £230,000 in reducing the tax gap, but we do not even really know what the gap is. You are only guessing that it is £4.5 million. It might be £3 million or £6 million. What about the impact of the general anti-avoidance rules? Surely they should reduce the tax gap substantially, if not virtually eliminate it. Issues such as sub-sale relief, which was covered by the bill, have been more or less eliminated. I am still trying to see where the tax gap could appear from.
I do not find the term “tax gap” that helpful.
I know, but it was in your report.
I know, I know. It is my own fault.
The general anti-avoidance rule allows Revenue Scotland to take action to get the money in. However, sitting there of itself without any Revenue Scotland or SEPA staff taking action against a taxpayer, the general anti-avoidance rule will not achieve anything. The additional staff that I want to bring in will use the powers that the Parliament has given them to go after the money.
It is not a tax gap in the sense that you have legislated to leave a gap; it is a gap in that you have legislated, but we expect that people’s behaviour will mean that not 100 per cent of everything that should come in will come in. We will have to use the powers that the Parliament has given us to take action to take in the money that would otherwise not come in.
That is interesting. Basically, you are saying that you are going to spend an extra £230,000 to reduce that gap because there is no point in having the rules if you do not have the people to enforce them. When the original staff costings were done, surely consideration must have been given to the possibility of compliance being part of the staffing structure—there would have to be a compliance section. It is not just that we have the rules so we need to bring in staff to ensure compliance; I would have thought that those staff would have been part of the structure from the off.
Indeed; that is the case. There are other staff who will be doing compliance work. There is a staffing structure, and there will be people who will do compliance work.
The £230,000 was to allow us to have a conversation with the Parliament about the net tax collected. Let us take out of the equation the three additional posts in Revenue Scotland. Of course we would collect tax with 38 staff, and of course they would undertake some compliance work.
As the legislation was developed and as the bill was introduced with the general anti-avoidance rule, we thought that we could take more action. I have therefore earmarked additional posts to take further action on compliance. We will track that, because we know that it is of interest, and we will be able to explain what has been achieved with those additional posts.
In effect, the aim is to allow the Parliament a choice. In future, you might scrutinise the measures and say that we have not demonstrated that having those extra posts was worth while, and we would return to a structure with basic compliance only. Alternatively, we might decide that the measures have been successful, and that it might be worth ramping up the effort. There are choices to be made.
Given that we do not really know whether the tax gap exists or what it is—whether it is £4.5 million or whatever—I find it difficult to see how you will be able to measure the impact of the additional compliance officers in reducing it. Next year you might say that the gap is £3 million, so those three people will have reduced it by £1.5 million—but they might not have done, because there might not have been a £4.5 million gap to start off with.
I will not measure it in that way. I will tell you what they have brought in, not whether they have reduced a gap that I cannot estimate by an amount.
We will not be able to tell you that we now know that the tax gap is some precise number and that it has reduced by some precise number. We will be able to tell you that the actions of the additional compliance officers have brought in a certain amount of additional tax revenue—or that they are on track to do so, if we are considering the very early stages.
That is why, with hindsight, the term “tax gap” might not have been the best way to cast the notion but the term is in common usage. We should probably have related it back to actions to ensure that all tax is paid, so that you would see an increase in tax take as a result of the work that the people would do. I do not know whether that helps.
Not really.
I want to ask about staffing more generally. In the section of your submission that is headed “Revenue Scotland Staffing”, you state that there are now
“two divisions ... with around 40 staff”.
You go on to say that you
“have agreed the anticipated future staffing structure ... and are currently completing the detailed planning and preparation for the recruitment of 41 staff”.
I am a bit confused. What will the total number be at the end of that recruitment phase? You can see my point. Are they different people? Will one group of people do something else once the other people have come in?
Most of them, yes. We have a team of 40, who are doing the set-up work. We have designed a staffing structure for go live with 41 posts. A small number of people—currently it is four, or possibly five—will move from the set-up team into operational posts eventually. The others who are involved in the set-up will leave as their work comes to an end. Meanwhile, we will be building up the operational team of 41.
At the peak, which will probably be around February or March, we will have a lot more than 41, because we will have people who are still finishing set-up work and we will have people coming in ready to do the operational work. Then, one team will dwindle to zero and the other team will build up.
Will those people come from other parts of the civil service, or will there be open advertisements?
We are looking only within the civil service, but potentially we will look beyond the Scottish Government, because we want some people with tax experience.
Will those numbers increase when it comes to 2016 and the full Scotland Act 2012 provisions kick in?
We do not anticipate any further increase based on the 2012 act, because the Scottish rate of income tax will not impact on Revenue Scotland. If there are any further powers to come, there will be further set-up work to do and that will have an impact on the operational staffing structure. There is nothing on the existing plan.
In general terms, your table shows the budgets declining significantly between 2014-15 and 2015-16. Is that right?
Yes. I have around £600,000-worth of set-up costs for Revenue Scotland and a bit more than that, in terms of IT set-up costs, running into 2015-16. However, on the current plan that drops away, assuming that there are no further taxes to set up.
Is there a figure for funding allocated to SEPA or Registers of Scotland?
Yes. Do you mean in terms of set-up costs?
I am talking about the 2015-16 costs.
The 2015-16 costs are projected to be fairly steady.
The costs for SEPA are £595,000 to £600,000.
What are the costs for Registers of Scotland?
We are predicting a running cost in the region of £325,000.
Okay.
The allocation for 2015-16 has been reduced from £40 million to £25.7 million. That is explained in part by the transfer of £4.3 million to a new budget line for Revenue Scotland. Can you explain what that budget line is?
That is Revenue Scotland’s budget, and the budget to pay for Registers of Scotland and SEPA costs in operating the taxes in 2015-16. Until now, we have operated with those costs being paid from within the Scotland Act 2012 implementation budget, but from April there will be an independent body, so it needs its own budget line. That is why there is a transfer out.
That is fine. We appear to have exhausted all the questions. Thank you very much.
Meeting closed at 11:57.Previous
Draft Budget Scrutiny 2015-16