The next item of business is stage 3 proceedings on the Revenue Scotland and Tax Powers Bill. In dealing with amendments, members should have the bill as amended at stage 2, SP bill 43A; the marshalled list, SP bill 43A-ML; and the groupings, SP bill 43A-G.
For further information, the division bell will sound and proceedings will be suspended for five minutes for the first division of the afternoon, should there be one. The period of voting for the first division will be 30 seconds. Thereafter, I will allow a voting period of one minute for the first division after a debate. Members who wish to speak in the debate on any group of amendments should press their request-to-speak buttons now, or as soon as possible after I call the group. Members should now refer to the marshalled list of amendments, and we will get started.
Section 8—Ministerial guidance
Amendment 1, in the name of the Cabinet Secretary for Finance, Employment and Sustainable Growth, is grouped with amendment 2.
The Delegated Powers and Law Reform Committee recommended in its stage 1 report on the bill that, where Scottish ministers give guidance to revenue Scotland under section 8 of the bill, a copy of that guidance should be laid before Parliament as well as being published. Amendments 1 and 2 will give effect to that recommendation.
I move amendment 1.
Amendment 1 agreed to.
Amendment 2 moved—[John Swinney]—and agreed to.
After section 37
Amendment 3, in the name of the cabinet secretary, is grouped with amendments 4 to 6 and 89 to 92.
The amendments in the group relate to the Scottish tax tribunals that will be established by part 4 of the bill, and are entirely technical in nature. Amendments 3, 4 and 5 will simply bring certain provisions of the bill into line with corresponding provisions in the Courts Reform (Scotland) Bill and the Tribunals (Scotland) Act 2014.
Amendment 6 will require Scottish ministers to consult the president of the Scottish tribunals, and such other persons as they consider appropriate, before making tribunal rules.
Amendment 89 relates to the eligibility criteria for the appointment of the president of the tax tribunals. The intention is to align the criteria with those for legal members of the upper tax tribunal.
Amendment 92 seeks to give effect to a recommendation of the Delegated Powers and Law Reform Committee by providing that any rules that are made by Scottish ministers about the procedure that is to be followed in proceedings at a fitness assessment tribunal are to be published.
I believe that the amendments in this group make minor and sensible adjustments.
I move amendment 3.
I welcome and support the amendments. They will bring the bill into line with corresponding provisions in the Courts Reform (Scotland) Bill, which seems right and proper, and with the effect that, in dealing with cases, the upper tribunal will have the same powers in relation to the petition as the Court of Session would have had.
In particular, we support amendment 89, which will bring the criteria for appointment of the president of the tax tribunals into line with the criteria for appointment of legal members of the upper tribunal. In so doing, it will rightly ensure that a person will be eligible for appointment only if that person has the qualifications, experience and training in tax law and practice that Scottish ministers consider to be appropriate.
The amendments in group 2 are welcome, and we support them.
As convener of the Delegated Powers and Law Reform Committee, I thank the cabinet secretary for taking on board our comments. A principle that we have adhered to in recent times is that we would like all guidance to be published. There seems to be no good reason why that should not be the case, and we are grateful to the cabinet secretary for taking our view on board.
I welcome the comments of Mr Don and Mr Gray. The amendments in the group will bring the relevant provisions into line with other elements of statute and will strengthen the bill, as a consequence.
Amendment 3 agreed to.
Section 41—Venue for hearings
Amendments 4 and 5 moved—[John Swinney]—and agreed to.
Section 46—Tribunal rules
Amendment 6 moved—[John Swinney]—and agreed to.
Section 59—Meaning of “artificial”
We come to group 3. Amendment 7, in the name of the cabinet secretary, is in a group on its own.
Amendment 7 addresses an issue that was raised by the Finance Committee in its stage 1 report on the bill, and by Mr Chisholm at stage 2. It relates to condition B of the general anti-avoidance rule, which provides that a tax avoidance arrangement is artificial if it lacks economic or commercial substance. Amendment 7, together with the amendments that the Finance Committee agreed to at stage 2, will put it beyond doubt that condition B of the general anti-avoidance rule extends to transactions between individuals as well as to commercial transactions between companies. I believe that clarifying the scope of the GAAR in that way is a useful and sensible amendment, and I am grateful to Mr Chisholm for raising the point at stage 2.
I move amendment 7.
I support amendment 7 and welcome the cabinet secretary’s recognition of the concerns that were raised at stages 1 and 2 by the committee, to which he has now responded.
As he said, amendment 7 will put it beyond doubt that condition B of the GAAR applies to transactions between individuals as well as to those between companies or businesses. Mr Chisholm pursued that point during stage 2, and we are delighted that the Scottish Government has recognised the point and has lodged the required amendment.
Amendment 7 agreed to.
Section 63—Notice to taxpayer of proposed counteraction of tax advantage
We move on to group 4. Amendment 8, in the name of the cabinet secretary, is grouped with amendments 8 to 16, 18, 22 to 26, 32 to 36, 62, 68 to 70, 73, 76 to 79, 81 to 85, 93 to 96, 106, 116 to 118 and 121.
Although there are a large number of amendments in this group, they are all for a single purpose—to insert into the bill and the two tax-specific acts new sections that will provide that any notice, application or other communication from a taxpayer to revenue Scotland must be in the form and manner, and contain the information, that are specified by revenue Scotland. That, in turn, will make it possible to remove a large number of specific references throughout the bill and the two previous tax acts that require notices to be “in writing”.
I have always made it clear that we want to put in place a tax system that is simple to operate and user-friendly for taxpayers and their agents, and the amendments will give revenue Scotland the flexibility to provide for secure electronic communication with taxpayers and their agents while still allowing for paper or other forms of communication in appropriate cases.
I move amendment 8.
Amendment 8 agreed to.
Amendments 9 and 10 moved—[John Swinney]—and agreed to.
15:30Section 64—Final notice to taxpayer of counteraction of tax advantage
Amendment 11 moved—[John Swinney]—and agreed to.
Section 69—Duty to keep and preserve records
Amendments 12 and 13 moved—[John Swinney]—and agreed to.
Section 74—Amendment of return by taxpayer
Amendment 14 moved—[John Swinney]—and agreed to.
Section 75—Correction of return by Revenue Scotland
Amendment 15 moved—[John Swinney]—and agreed to.
Section 78—Amendment of self-assessment during enquiry to prevent loss of tax
Amendment 16 moved—[John Swinney]—and agreed to.
We move to group 5. Amendment 17, in the name of the cabinet secretary, is the only amendment in the group.
Section 78 provides that a taxpayer must pay any tax that is due when revenue Scotland gives a notice of amendment under section 78. That is not quite right, because the point at which payment is due should be when the taxpayer receives the notice, not when revenue Scotland issues it. Amendment 17 seeks to make that change.
I move amendment 17.
Amendment 17 agreed to.
Section 84—Completion of enquiry
Amendment 18 moved—[John Swinney]—and agreed to.
Section 89—Assessment where loss of tax
We move to group 6. Amendment 19, in the name of the cabinet secretary, is grouped with amendments 20, 21, 30, 31, 37, 38, 74, 86 to 88, 99, 100 to 103, 105, 107, 108, 110, 111, 113, 120, 122 and 124.
These 25 amendments are minor and technical in nature and in general will improve the clarity and consistency of the bill’s provisions, and the interface between the bill’s overarching framework and the first two tax-specific acts. Amendment 124 ensures that the Procurement Reform (Scotland) Act 2014 will, when it comes into force, apply to revenue Scotland in the same way that it will apply to other public bodies in Scotland.
I move amendment 19.
Amendment 19 agreed to.
Section 96—Assessment procedure
Amendments 20 and 21 moved—[John Swinney]—and agreed to.
Section 115—Power to obtain information and documents from taxpayer
Amendment 22 moved—[John Swinney]—and agreed to.
Section 116—Power to obtain information and documents from third party
Amendment 23 moved—[John Swinney]—and agreed to.
Section 119—Power to obtain information and documents about persons whose identity is not known
Amendment 24 moved—[John Swinney]—and agreed to.
Section 122—Power to obtain information about persons whose identity can be ascertained
Amendment 25 moved—[John Swinney]—and agreed to.
Section 125—Producing copies of documents
Amendment 26 moved—[John Swinney]—and agreed to.
Section 127—Information notices: general restrictions
We move to group 7. Amendment 27, in the name of John Swinney, is the only amendment in the group.
Section 94(4)(a) imposes a three-year time limit after a taxpayer has died for revenue Scotland to issue an assessment to the taxpayer’s personal representatives, and amendment 27 will bring the time limit for an information notice that is given in connection with a deceased taxpayer into line with that section.
I move amendment 27.
Amendment 27 agreed to.
Section 135A—Carrying out inspections under section 133 or 134: further provision
We move to group 8. Amendment 28, in the name of the cabinet secretary, is grouped with amendment 29.
Although section 140 provides a power to enter business premises and to take samples of material, it is not, as the bill stands, supported by a penalty. On reflection, I think it right that a person who obstructs a designated officer in the exercise of that power should be liable to a penalty under section 167. Amendment 28 seeks to provide for that by bringing the power to take samples of material on premises within the scope of a designated officer’s powers under section 135A. That means that we no longer need a power of entry coupled with the power to take samples.
Moreover, section 167(1)(b) provides that a person is liable to a penalty for obstructing an officer exercising any power under section 135A. Amendment 29 is consequential on amendment 28.
I move amendment 28.
Amendment 28 agreed to.
Section 140—Power to take samples
Amendment 29 moved—[John Swinney]—and agreed to.
Section 143—Computer records
Amendment 30 moved—[John Swinney]—and agreed to.
Section 144—Review or appeal against information notices
Amendment 31 moved—[John Swinney]—and agreed to.
Section 145—Disposal of reviews and appeals in relation to information notices
Amendments 32 and 33 moved—[John Swinney]—and agreed to.
Section 146—Offence of concealing etc documents following information notice
Amendment 34 moved—[John Swinney]—and agreed to.
Section 147—Offence of concealing etc documents following information notification
Amendments 35 and 36 moved—[John Swinney]—and agreed to.
Section 150B—Land and buildings transaction tax: 3 month penalty for failure to make return
Amendments 37 and 38 moved—[John Swinney]—and agreed to.
Section 151—Penalty for failure to pay tax
We move to group 9. Amendment 39, in the name of the cabinet secretary, is grouped with amendments 40 to 44.
Amendments 39 and 40 address an issue that Gavin Brown raised at stage 2 about the date after which a taxpayer becomes liable to a penalty for late payment of tax. Section 151 provides that, for both devolved taxes, the taxpayer becomes liable to a penalty for late payment of tax on the day after payment was due. At stage 2, Mr Brown suggested that that could be harsh and asked whether there was scope for flexibility.
After considering the matter further, I believe that it would be fair to give the taxpayer 30 days to pay any overdue tax in relation to a land and buildings transaction tax return before they become liable for a penalty for late payment. However, I do not believe that a similar amendment is necessary in relation to a Scottish landfill tax return. Landfill operators will be required to make regular quarterly returns, so they will be fully aware of their tax obligations.
The amendments in the group will also give the taxpayer 30 days to pay tax that is due in relation to a revenue Scotland amendment under section 78, and a revenue Scotland determination under section 86, before becoming liable to a penalty. At present, a penalty would be imposed immediately in both cases. On reflection, I believe that it would be fair to give the taxpayer 30 days to pay tax that is due before becoming liable to pay a penalty for late payment. I am grateful to Mr Brown for raising the issue at stage 2.
I move amendment 39.
I support the amendments and am grateful to the cabinet secretary for lodging them. The idea of an instant penalty struck me as being a little harsh in some cases. The flexibility and changes that he has proposed strike the right balance, so I am pleased to support the amendments.
Amendment 39 agreed to.
Amendments 40 to 44 moved—[John Swinney]—and agreed to.
Section 152—Interaction of penalties under section 150 with other penalties
We move to group 10. Amendment 45, in the name of the cabinet secretary, is grouped with amendments 46 to 61, 63 to 67, 71 and 72.
At stage 2, a number of amendments were made to part 8, which is on penalties, including the addition of a number of sections on penalties for failing to make a tax return and failing to pay tax. The amendments in the group will tidy cross-references in part 8 following the addition of the sections, and will align section 152 with the approach that is taken in section 181B, which was added at stage 2.
I move amendment 45.
Amendment 45 agreed to.
Amendments 46 and 47 moved—[John Swinney]—and agreed to.
Section 153—Interaction of penalties under section 151 with other penalties
Amendment 48 moved—[John Swinney]—and agreed to.
Section 154—Reduction in penalty under section 150 for disclosure
Amendment 49 moved—[John Swinney]—and agreed to.
Section 155—Suspension of penalty under section 151 during currency of agreement for deferred payment
Amendment 50 moved—[John Swinney]—and agreed to.
Section 156—Special reduction in penalty under sections 150 and 151
Amendment 51 moved—[John Swinney]—and agreed to.
Section 157—Reasonable excuse for failure to make return or pay tax
Amendments 52 and 53 moved—[John Swinney]—and agreed to.
Section 158—Assessment of penalties under sections 150 and 151
Amendments 54 to 58 moved—[John Swinney]—and agreed to.
Section 159—Time limit for assessment of penalties under sections 150 and 151
Amendments 59 to 61 moved—[John Swinney]—and agreed to.
Section 161—Suspension of penalty for careless inaccuracy under section 160
Amendment 62 moved—[John Swinney]—and agreed to.
Section 164—Special reduction in penalty under sections 160, 162 and 163
Amendment 63 moved—[John Swinney]—and agreed to.
Section 165—Reduction in penalty under sections 160, 162 and 163 for disclosure
Amendment 64 moved—[John Swinney]—and agreed to.
Section 166—Assessment of penalties under sections 160, 162 and 163
Amendments 65 to 67 moved—[John Swinney]—and agreed to.
Section 171—Concealing, destroying etc documents following information notice
Amendment 68 moved—[John Swinney]—and agreed to.
Section 172—Concealing, destroying etc documents following information notification
Amendments 69 and 70 moved—[John Swinney]—and agreed to.
Section 181B—Interaction of penalties under section 181 with other penalties
Amendments 71 and 72 moved—[John Swinney]—and agreed to.
Section 193—Power to obtain details
Amendment 73 moved—[John Swinney]—and agreed to.
Section 195—Penalty
Amendment 74 moved—[John Swinney]—and agreed to.
Section 198—Appealable decisions
We move to group 11. Amendment 75, in the name of the cabinet secretary, is grouped with amendments 80 and 97.
Amendment 75 provides that any decision that revenue Scotland makes in relation to the registration of a person for tax purposes will be both appealable and reviewable. That is particularly relevant to sections 22 and 23 of the Landfill Tax (Scotland) Act 2014.
Amendment 80 corrects section 210 of the bill by providing that, in certain circumstances, the general rule that tax, penalties and interest are payable pending review or appeal will not apply. Amendment 97 will ensure consistency with the rule that all notices of appeal are given to the tribunal and not revenue Scotland.
I move amendment 75.
Amendment 75 agreed to.
Section 200—Notice of review
Amendment 76 moved—[John Swinney]—and agreed to.
Section 201—Late notice of review
Amendment 77 moved—[John Swinney]—and agreed to.
Section 207—Notice of appeal
Amendment 78 moved—[John Swinney]—and agreed to.
Section 208—Late notice of appeal
Amendment 79 moved—[John Swinney]—and agreed to.
Section 210—Reviews and appeals not to postpone recovery of tax
Amendment 80 moved—[John Swinney]—and agreed to.
Section 211—Settling matters in question by agreement
Amendment 81 moved—[John Swinney]—and agreed to.
Section 212—Application of this Part to joint buyers
Amendment 82 moved—[John Swinney]—and agreed to.
Section 213—Application of this Part to trustees
Amendment 83 moved—[John Swinney]—and agreed to.
Section 215—Interpretation
Amendment 84 moved—[John Swinney]—and agreed to.
Before section 216
Amendment 85 moved—[John Swinney]—and agreed to.
Section 218—Subordinate legislation
Amendments 86 to 88 moved—[John Swinney]—and agreed to.
Schedule 2—The Scottish Tax Tribunals
Amendments 89 to 92 moved—[John Swinney]—and agreed to.
Schedule 3—Claims for relief from double assessment and for repayment
Amendments 93 to 97 moved—[John Swinney]—and agreed to.
Schedule 4—Minor and consequential modifications
We move to group 12. Amendment 98, in the name of the cabinet secretary, is in a group on its own.
Amendment 98 will amend the Debtors (Scotland) Act 1987 to ensure that the same enforcement machinery that is available to Her Majesty's Revenue and Customs for the recovery of tax, penalties and interest that are owed by taxpayers is also available to revenue Scotland.
The bill provides ample opportunities for taxpayers to challenge decisions that are taken by revenue Scotland if they disagree with them. However, once legal liability for tax has finally been determined, if a taxpayer fails to pay the tax that is due, revenue Scotland should be able to enforce that debt effectively, in the same way as HMRC.
I move amendment 98.
Amendment 98 agreed to.
Amendments 99 to 103 moved—[John Swinney]—and agreed to.
We move to group 13. Amendment 104, in the name of the cabinet secretary, is grouped with amendments 109, 112, 114, 115, 119 and 123.
Schedule 4 to the Revenue Scotland and Tax Powers Bill makes a number of final consequential amendments to both tax-specific acts to ensure that they fit together properly and seamlessly with the overarching framework that is set out in the bill.
Amendments 104, 109 and 112 relate to amendments to the Land and Buildings Transaction Tax (Scotland) Act 2013. Amendment 109 is the main substantive amendment in relation to those three amendments and concerns recovery of land and buildings transaction tax reliefs. The reliefs in question are group relief, reconstruction relief and acquisition relief, all of which must be claimed by the taxpayer in a land transaction return.
The LBTT act already provides for the withdrawal of those reliefs when the circumstances that justify relief are no longer in place, in which case the taxpayer must pay the tax for which they had earlier claimed. The legislative machinery that will be introduced by amendment 109 empowers revenue Scotland to recover those sums of tax and makes appropriate adjustments to the Revenue Scotland and Tax Powers Bill for that purpose.
Amendments 114, 115, 119 and 123 relate to amendments to the Landfill Tax (Scotland) Act 2014.
Amendment 119, which allows for the alignment of waste data return periods and Scottish landfill tax return periods, was proposed in the consultation paper that we published in May 2014 on Scottish landfill tax subordinate legislation. I can confirm to Parliament that our proposals for aligning environmental and tax returns were welcomed by stakeholders. Aligning the periods will allow for greater clarity when conducting compliance checks, and for greater information technology synergies between the Scottish Environment Protection Agency and revenue Scotland while, we hope, reducing some of the administrative burden on landfill operators.
The other amendment in the group that I will draw particular attention to is amendment 114, which will allow the forthcoming Scottish landfill tax regulations to penalise failures to use weighbridges. The aim is to deter landfill operators from taking advantage of using alternative methods of calculating weight when there is a working weighbridge on site. Amendment 123 will ensure that any penalty provisions that are included in regulations are subject to affirmative procedure.
I move amendment 104.
Amendment 104 agreed to.
Amendments 105 to 124 moved—[John Swinney]—and agreed to.
That ends consideration of amendments.
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