25.04.2013
The Scottish Parliament’s Public Audit Committee is calling for views from tax and audit experts on the level of scrutiny and transparency HMRC should be subject to when collecting the Scottish Rate of Income Tax.
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The new Scottish Rate of Income Tax (SRIT) comes into force in Scotland in 2016. It will be set the Scottish Parliament and collected by HM Revenue and Customs.
UK Government figures estimate the cost of setting up the new tax collection system at £40-45 million, with annual running costs of £4.2 million thereafter, costs which will be borne by the Scottish Government.
The Public Audit Committee says it is vital that the Scottish Parliament is able to scrutinise HMRC and hold it to account over its performance when collecting the new tax.
Public Audit Committee Convener Iain Gray MSP said:
“While the referendum debate gathers pace, we must not overlook the introduction of the SRIT. Whatever way the referendum turns out the SRIT comes into effect in 2016.
“The Scottish and UK Governments are already working together on its introduction, but it’s important that the Scottish Parliament is able to scrutinise how HMRC performs when collecting this tax.
“In short we are examining ‘what level of detail do we need to be able to hold HMRC to account?’.
“The implications of not collecting this tax properly could be profound for future years Scottish spending, and we want HMRC to be able to demonstrate to this Parliament that it is doing its job effectively and efficiently.
“Our view is that without proper data on things like compliance rates, error and fraud levels, the ‘tax gap’ and so on it will be impossible for this Parliament to determine how successful HMRC has been in collecting this tax. Over the coming months we will be examining carefully what would make a suitable audit framework.”
Call for evidence
The committee’s call for evidence lists ten questions on which views are sought from all interested parties and individuals. The deadline for responses is 1 July 2013.
Background
The Scotland Act 2012 devolves a number of new powers to the Scottish Government and the Scottish Parliament. Some of the most significant relate to the finance provisions of 2012 Act and include provisions to set a new Scottish rate of income tax.
The Scottish Parliament’s Public Audit Committee recognises that with the new powers for a SRIT there will also be a change to the existing audit framework in Scotland. It has therefore published today an interim report on its proposed framework for auditing the Scottish Rate of Income Tax .
The report and call for evidence can be found on the Public Audit Committee homepage.