Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: business and regulatory impact assessment
Business and regulatory impact assessment (BRIA) for the Aggregates Tax and Devolved Taxes Administration (Scotland) Bill.
Summary and recommendation
After careful consideration, the Scottish Government recommends the adoption of option 2, which is to introduce a tax that is broadly similar in structure and operation as UKAL. We recommend this option on the basis that it will reduce the uncertainty for current and future taxpayers and their customers and make the transition between taxes easier for the businesses affected, while still aligning with the Scottish Government's circular economy objectives.
On balance, the Scottish Government also recommends the inclusion of the measures in Part 2 of the Bill. This takes account in particular of the relative infrequency with which primary legislation on tax matters is brought forward for consideration by the Scottish Parliament, the views of Revenue Scotland on the benefits that the provisions could bring in providing certainty and supporting the efficient and effective collection of tax and the nature and context of the provisions.
Summary costs and benefits tables
| Option | Total benefit per annum: - economic, environmental, social | Total cost per annum: - economic, environmental, social - policy and administrative |
|---|---|---|
| Do not replace UKAL once it is disapplied in Scotland. | The cost of primary aggregates to aggregate producers and potentially customers would be reduced. The cost to primary aggregate producers of making tax returns would be reduced. There would be no additional costs to the Scottish Government in relation to the implementation, collection and administration of the tax. |
The Scottish block grant payment will be adjusted to reflect the fact that UKAL would be dis-applied in Scotland, which will result in an immediate material reduction in the Scottish budget. There would potentially be an increase in primary aggregate production and a decrease in recycled aggregate production undermining circular economy ambitions of the Scottish Government. The option to dis-apply the tax would potentially disrupt the policy landscape expected by recycled aggregate producers and undermine investment opportunities in the development of new products which might substitute for aggregates. |
| Introduce a replacement tax that retains the fundamental structure of UKAL while being tailored to Scotland's needs. | There will continue to be a financial incentive to shift demand from primary aggregate towards recycled aggregate, wastes and other by-products. There will be continuity and consistency for taxpayers while allowing for the tax to evolve over time. The Scottish Government and Revenue Scotland will be able to provide for the improved collection and administration of the tax. The Scottish Government will retain revenue from SAT, with an associated reduction in the Block Grant. |
There will be costs to taxpayers to register for and administer SAT. Although these costs are expected to be minimally different from under UKAL. Some primary aggregate producers will need to register for both SAT and UKAL. There will be costs to Revenue Scotland for the set up and ongoing administration of SAT. |
| Provide for a replacement tax that takes a fundamentally different approach to the existing UKAL. | There would potentially be significant disruption to the aggregates industry and their customers. There would be increased cross-border complications and increased risk of double taxation on quantities of aggregate. There is increased scope for unintended consequences. |
| Option | Total benefit per annum: - economic, environmental, social | Total cost per annum: - economic, environmental, social - policy and administrative |
|---|---|---|
| Include the devolved tax administration provisions in the bill | The devolved tax administration provisions will support efficient and effective collection of fully devolved taxes and provide additional certainty for taxpayers | The provisions do not change the amount of tax due or create any new obligations for taxpayers There is not expected to be any additional costs in terms of Revenue Scotland's operations. |
| Do not include the devolved tax administration provisions in the bill | This option would allow for consultation on the provisions to be undertaken with taxpayers and interested organisations. | The efficient and effective collection of devolved taxes would not be improved |
Contact
Email: Devolvedtaxes@gov.scot
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