The Official Report is a written record of public meetings of the Parliament and committees.
All Official Reports of meetings in the Debating Chamber of the Scottish Parliament.
All Official Reports of public meetings of committees.
Displaying 3032 contributions
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
So it is a notional figure. What is its purpose?
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
Surely it indicates that there is a flaw in the process.
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
Given that the problem has been happening every year since the system was instituted, it must endemic to it.
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
I turn to one or two specific issues. Paragraph 1.2 on page 10 says:
“HMRC calculates the final outturn figure from several components”,
but it does not actually mention what those components are. I do not know whether explaining them will require a lengthy response. If it requires just a short one, that will be fine, but if not, you can perhaps drop us a note.
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
That would be excellent.
Paragraph 1.5 on page 11 says:
“In some areas of the calculation, data are not available in sufficient detail to identify income tax liabilities, reliefs or other adjustments relating to individual taxpayers.”
Again, that will require making a huge estimate.
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
But if it happens every year, there is clearly a flaw in the system.
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
Does that 1 per cent equate to approximately the same as the UK figure?
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
Mr Davies, I have been involved with public audit committees since the Scottish rate of income tax was introduced several years ago. I want to begin with a very simple question, and then I will focus more on the actual report.
One of the things that jumps out of the report is the 70 per cent increase in the number of missing Scottish postcodes. It still represents a small proportion of the taxpayer population, but if it includes large numbers of high-net-worth individuals, it could have a significant effect on the tax collected. What is behind that increase? What is driving the error?
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
I refer back to our previous discussion. There are four bullet points in paragraph 1.23 on page 17 of the report that I find very telling in terms of the robustness of the figures around Scottish income tax. To me, they clearly indicate that there is a real problem in calculating the figures.
We talked about the notional £800 million figure. Bullet point 3 says that the figures that are being used
“do not exclude tax from savings and dividend income”.
You cannot possibly get something accurate out of those figures, because that is not an area within the Scottish Government’s tax authority.
Bullet point 2 refers to the “differing proportions” of types of taxpayers north and south of the border. The figures are completely distorted, because London, for example, is massively overrepresented in terms of the top income tax payers. We do not have that situation in Scotland. If we are using a methodology to calculate the figures that does not account for that incredible difference, how can the figures possibly be accurate?
Public Audit Committee
Meeting date: 3 February 2022
Colin Beattie
But it comes back to the theme of estimates and assumptions that runs through all of this. For example, paragraph 1.11 on page 13 says:
“HMRC deducts an estimate of the Scottish share of tax reliefs given against PAYE liabilities.”
How does it reach that figure? What is it based on? Is it based on some of the flawed data that you have highlighted in paragraph 1.23?