Scotland Acts 2012 and 2016 implementation: annual reports

1. Introduction

Fourth Annual Report on the Implementation of the Scotland Act 2016

Eighth Annual Report on the Implementation and Operation of Part 3 (Financial Provisions) of the Scotland Act 2012

Presented to Parliament pursuant to Section 33(2)(b) of the Scotland Act 2012

Laid before the Scottish Parliament

SG/2020/31

April 2020

1.1.1 This is the eighth annual report on the implementation and operation of Part 3 (Financial Provisions) of the Scotland Act 2012 and the fourth report on the implementation of the Scotland Act 2016.

1.1.2 It is intended to inform Parliament of the implementation work that has been carried out on fiscal powers in the Scotland Acts 2012 and 2016 as required by Section 33 of the Scotland Act 2012 and paragraph 107 of the Fiscal Framework. The UK Government produces a separate report on the implementation work they have carried out.

1.1.3 The Scotland Act 2012 was granted Royal Assent in May 2012 and represented the first transfer of fiscal powers from Westminster to the Scottish Parliament following devolution. These included:

• The creation of a new Scottish rate of income tax;
• The disapplication of UK Stamp Duty Land Tax in Scotland and provision for the introduction of a new Scottish tax on land transactions;
• The disapplication of UK Landfill Tax in Scotland and provision for the introduction of a new Scottish tax on disposals to landfill;
• Provision for capital borrowing by Scottish Ministers; and
• The power to create new devolved taxes.

1.1.4 The Scotland Act 2016 received Royal Assent in March 2016 and devolved a range of further powers to the Scottish Parliament. These included:

• Further income tax powers including the power to set rates and bands income;
• Assignment of VAT;
• Certain social security benefits;
• Air passenger duty;
• Aggregates levy; and
• Fines, forfeitures and fixed penalties.

1.1.5 This report provides an update on these sections, as well as non-legislative elements in the Fiscal Framework including^[1]:

• Block grant adjustments;
• Administration and implementation costs;
• Spillover effects;
• Borrowing; and
• Scotland Reserve.

1.1.6 The report provides an update on all legislative, policy and implementation work that has been carried out since the previous report on 24 April 2019 and outlines any forecast administration and implementation costs incurred in 2019-20.

1.1.7 Administration costs are the ongoing costs incurred in supporting the delivery of the Scottish Government's responsibilities under the Scotland Acts 2012 and 2016. Implementation costs are one-off costs associated with the initial investment to set up all the necessary systems and other elements required for the delivery of the powers under the Scotland Acts 2012 and 2016, whether through setting up a body or a service, implementing IT systems.

1.1.8 The next report will be published in 2021.