A Consultation on Tax Management: Analysis of Responses

2. INTRODUCTION

2.1 The Scotland Act 2012 introduces new financial powers for the Scottish Parliament, including powers to introduce new taxes to replace the UK Stamp Duty Land Tax and the Landfill Tax in Scotland from 1 April 2015.

2.2 In his statement^[3] to the Scottish Parliament (7 June 2012), the Cabinet Secretary for Finance, Employment and Sustainable Growth, John Swinney MSP, confirmed plans to consult on and bring forward Bills to introduce a Land and Buildings Transition Tax (LBTT) and a Scottish Landfill Tax (SLT). Consultations on the LBTT and on the SLT have been completed. The Scottish Government introduced a LBTT Bill to the Scottish Parliament on 30 November 2012, and a SLT Bill on 17 April 2013.

2.3 In his statement, Mr Swinney also announced the Scottish Government's intention to introduce a third Bill on Tax Management. This Bill will focus on putting in place a statutory framework for the collection and management of devolved taxes. A key aspect of this is the introduction of Revenue Scotland, as the Scottish tax authority, along with clearly defined powers and duties. It is intended that associated arrangements also to be covered in the Bill will include encouraging tax compliance; tackling tax avoidance; resolving tax disputes; and appropriate handling of taxpayer information.

2.4 The Scottish Government's approach to tax was articulated in the statement to the Scottish Parliament on 7 June 2012 as based upon four governing principles:

• proportionate to ability to pay;
• certainty;
• convenience; and
• efficiency.

2.5 In addition, it is proposed that the Scottish approach will be tailored to the requirements of Scots law and practice and will be characterised by a strong focus on public engagement with taxpayers and tax professionals.

2.6 The Scottish Government published a written consultation paper, "A Consultation on Tax Management" (10 December 2012) to seek views on tax management issues. In view of the importance and complexity of the topics for consideration, the normal consultation period was extended to four months. This also provided time for responses to the previous two related consultations to be received and analysed.^[4] In addition to publishing a consultation document, the Scottish Government held seven stakeholder events across Scotland.

2.7 The written consultation closed on 12 April 2013. This report presents the analysis of views contained in the responses. These responses have been made publicly available on the Scottish Government website^[5] unless the respondent has specifically requested otherwise. The views contained in the responses will inform the drafting of the proposed Tax Management Bill to be introduced to the Scottish Parliament in the autumn of 2013.

Consultation responses

2.8 Twenty eight written responses to the consultation were submitted. It should be noted that some of the responses received reflected the balance of views across a wider membership or audience. So although 28 responses were received in total, they reflect the views of many more commentators.

2.9 Table 1 shows the numbers of responses by category of respondent. Tax accountants and other professional tax bodies formed the largest category of respondent, accounting for 32% of responses. All but one of the responses were submitted by organisations. The full list of respondents is in Annex 3.

Table 1: Number of responses by category of respondent

2.10 An electronic database was used to collate the responses to assist analysis. In view of the relatively small number of responses and the open nature of most of the questions, the analysis of views was largely qualitative. Respondents did not address every question but selected the topics of most interest to them. An indication of which respondents provided views is given for each question.

Report of findings

2.11 The following eight chapters document the substance of the analysis. Chapter 3 examines views on the proposed new tax authority, Revenue Scotland. Chapter 4 presents comments on the proposed framework for tax collection powers and on taxpayers' obligations. Chapter 5 summarises ideas for how to help taxpayers comply with their obligations, and discusses views on the appropriateness of sanctions for non-compliance. Chapter 6 looks at the issue of tackling tax avoidance and documents comments on measures to address this. In Chapter 7, views on proposals for resolving tax disputes, including the voluntary use of mediation, are examined. Chapter 8 focuses on the topic of disclosure and sharing of taxpayer information, including the purposes for which information should be shared and the form of any information sharing agreement. Views on proposals for an accelerated tax change regime are collated in Chapter 9. Chapter 10 presents more general views which some respondents chose to submit on topics over and above those highlighted in the formal consultation document.

2.12 Respondent categories have been abbreviated in the report as follows: