I am not trying to trip anybody up, but are you saying that you do not think that the Scottish Fiscal Commission uses that estimate, but you use it as a reference point?

Okay. We might return to that before we finish.

My next question is for Jonathan Athow. The Audit Scotland report that accompanies the NAO report made a point about good governance and assurance arrangements and the need to keep those under continual review. It said that the process should include

“ongoing consideration of the frequency of third-party data checks and Service Level Agreement performance measures, such as setting compliance target levels for Scottish taxpayers without ‘S’ prefixes.”

Why has HMRC still not introduced a target in relation to the number of missing S prefixes? Will it do so at some point in the future?

I welcome Graham Simpson, who is an MSP for Central Scotland and who joins us for item 2, which is consideration of the 2020-21 audit of South Lanarkshire College.

I am pleased to welcome the Auditor General for Scotland, Stephen Boyle, to give evidence to the committee. We are also joined by Rebecca Seidel, who is a performance audit and best value manager at Audit Scotland, and by Lucy Nutley, who is a director at Mazars and who I think carried out the audit on the ground at the college.

I invite the Auditor General to give us a short opening statement.

We will need to consider what point is the right juncture to bring in the accountable officers, if that is the route that we decide to go down. I will bring in Willie Coffey at this point.

Thank you for setting out that introductory framework. I am sure that you will have read the evidence that the committee took on 3 February. We were particularly exercised by the fact that we are in years 4 and 5 of a distinctive Scottish income tax system but there appear to be what, in our eyes, look like significant gaps in the data that is available and in the evidence that we think is necessary to allow Parliament and the Government to make informed decisions and choices about income tax policy in Scotland.

We are particularly interested in the level of compliance activity that is Scotland specific, in whether there is sufficient—or any—data on the tax gap in Scotland, and in the extent to which the information can be interrogated and analysed, which we think is extremely important in fashioning the evidence upon which we can build a sustainable and effective tax system.

You mentioned service level agreements, which we will return to. We are very pleased that the Scottish exchequer and HMRC are here as parties to that agreement, because we will want to explore that in our questions.

I call the deputy convener, Sharon Dowey, to open the questioning.

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?

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?

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.

You can comment without prejudice, if you like, Jonathan.

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?