Scottish Aggregates Tax administration regulations: consultation

3. Revenue Scotland and Tax Powers Act 2014

Background

3.1 The Revenue Scotland and Tax Powers Act 2014 (RSTPA) makes provisions for a Scottish tax system to enable the collection and management of Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) - “the devolved taxes”. It established Revenue Scotland as the tax authority responsible for collecting Scotland’s devolved taxes from 1 April 2015. It put in place a statutory framework which applies to the devolved taxes and sets out the relationship between the tax authority and taxpayers in Scotland, including the relevant powers, rights and duties.

3.2 SAT is intended to come into force on 1 April 2026, as the third devolved tax. Changes are therefore required to the RSTPA to ensure that SAT is operationally effective with regards to the wider devolved taxes legislative regime.

3.3 The following sections 3.A – 3.E set out the proposed changes to the Revenue Scotland and Tax Powers Act 2014 (RSTPA) regulations^[10] and the First-tier Tribunal for Scotland Tax Chamber regulations^[11].

A. The Revenue Scotland and Tax Powers Act (Record Keeping) Regulations 2015

3.4 The Revenue Scotland and Tax Powers Act (Record Keeping) Regulations 2015^[12] make provisions about records which must be kept in relation to the existing devolved taxes.

3.5 These administration regulations make provision for adding record-keeping requirements for SAT. The relevant power is provided at Revenue Scotland and Tax Powers Act 2014 s74(9)^[2].

3.6 The regulations provide that for the purposes of SAT the following records should be required to be preserved:

• the person’s business and accounting records.
• an Aggregates Tax account in such form and containing such particulars as may be specified in a notice published by Revenue Scotland (and not subsequently withdrawn);
• all invoices (including aggregates invoices) and similar documents issued to the person and copies of such invoices and similar documents issued by the person;
• all credit or debit notes or other documents received by the person which evidence an increase or decrease in the amount of any consideration for a relevant transaction, and copies of such documents that are issued by the person;
• documentary evidence (including the workings and all relevant background documents) to explain and support any calculation of the weight of taxable or exempt aggregate;
• transfer notes, haulage slips or other documentation that relates to material that is brought into or taken from a site; and
• such other records as may be specified in a notice published by Revenue Scotland (and not subsequently withdrawn).

3.7 The regulations also provide that relevant persons keep records specified in the proposed SAT administration regulations, particularly those relating to claims for credit as set out in Parts 6 - 8.

3.8 Persons who are exempt from the requirement to be registered but required to notify Revenue Scotland of exempt aggregate production are required to keep any records needed to support their exempt status. Other such records may be specified in a published notice by Revenue Scotland.

Questions

30. Do you agree that the provisions as drafted work as intended?

31. If not, what amendments would you propose to the draft legislation and on what basis?

32. Do you agree with the records to be retained for the purposes of the Scottish Aggregates Tax?

33. Do you agree with the records to be retained in relation to claims for credit, and for evidence of exempt status for the tax?

B. The Revenue Scotland and Tax Powers Act (Involved Third Party) Order 2015

3.9 The Revenue Scotland and Tax Powers Act (Involved Third Party) Order 2015 regulations^[13] make provisions about the inspection of third parties related to taxable disposals for the purpose of Scottish Landfill Tax. The relevant power is provided at Revenue Scotland and Tax Powers Act 2014 s142(3)^[14].

3.10 These regulations will add a provision for the inspection of involved third parties related to SAT (being defined as a person involved (in any capacity) with the commercial exploitation of taxable aggregate).

Questions

34. Do you agree that the provisions as drafted work as intended?

35. If not, what amendments would you propose to the draft legislation and on what basis?

36. Do you agree with an involved third party being defined as a person involved (in any capacity) with the commercial exploitation of taxable aggregate?

C. The Revenue Scotland and Tax Powers Act (Postponement of Tax Pending a Review or Appeal) Regulations 2015

3.11 The Revenue Scotland and Tax Powers Act (Postponement of Tax Pending a Review or Appeal) Regulations 2015^[15] provide that where a review or appeal under Part 11 of the Revenue Scotland and Tax Powers Act 2014 is in progress, a LBTT taxpayer may make an application to Revenue Scotland to postpone the payment of tax, penalty or interest. The relevant power is at Revenue Scotland and Tax Powers Act 2014 s245^[16].

3.12 This administration regulation will apply the existing provisions to the Scottish Aggregates Tax.

Questions

37. Do you agree that the provisions as drafted work as intended?

38. If not, what amendments would you propose to the draft legislation and on what basis?

39. Do you agree that the provision to postpone the payment of tax, penalty of interest where a review or appeal is in progress should be extended to a Scottish Aggregates Tax taxpayer?

D. The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015

3.13 The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015^[17] relates to the date in which interest on unpaid tax is payable from.

3.14 This administration regulation will make SAT amendments to The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015 to specify that interest is due from the date that the filing of the return is due. The relevant power is Revenue Scotland and Tax Powers Act 2014 s217^[18]. The proposed amendment would be the addition of an entry to the table at regulation 4 which specifies that interest is due from the date that the filing of the return is due.

Questions

40. Do you agree that the provisions as drafted work as intended?

41. If not, what amendments would you propose to the draft legislation and on what basis?

42. Do you agree with the amendment which specifies that interest on unpaid tax is due from the filing date?

E. Revenue Scotland and Tax Powers Act (Scottish Courts and Tribunal Service) (Amendment) Regulations

3.15 To ensure that taxpayers and their agents have access to administrative justice, two Tax Tribunals, with a First-tier and Upper Tribunal, were established by the Revenue Scotland and Tax Powers Act 2014 to hear appeals relating to Land and Buildings Transaction Tax and Scottish Landfill Tax.

3.16 The First-tier Tribunal decides appeals against Revenue Scotland decisions, whereas the Upper Tribunal decides appeals on a point of law from decisions of the First-tier Tribunal, and the Scottish Courts and Tribunals Service (SCTS) provides administrative support for both.

3.17 The Scottish Tribunals are structured with the Tax Chamber of the First-tier Tribunal for Scotland and Upper Tribunal for Scotland led by the President of the Scottish Tribunals. Administrative support is provided by the Scottish Courts and Tribunals Service, and appeals are heard by the Members of the Tax Tribunals. Both the President and the Members have been appointed by Scottish Ministers.

3.18 The First-tier Tribunal for Scotland (Transfer of Functions of the First-tier Tax Tribunal for Scotland) Regulations 2017^[19] and The Upper Tribunal for Scotland (Transfer of Functions of the Upper Tax Tribunal for Scotland) Regulations 2017^[20] provide for the establishment of the Tax Tribunals to hear appeals and exercise other functions in relation to devolved taxes.

3.19 This administration regulation would add provision for appeals to be heard regarding SAT.

3.20 The First-tier Tribunal for Scotland (Transfer of Functions of the First-tier Tax Tribunal for Scotland) Regulations 2017^[21] and The Upper Tribunal for Scotland (Transfer of Functions of the Upper Tax Tribunal for Scotland) Regulations 2017^[22] also transferred the functions of the First-tier Tax Tribunal and Upper Tax Tribunal to the First-tier Tribunal for Scotland and Upper Tribunal for Scotland and allocated to the Tax Chamber, which is where SAT appeals would be heard.

Questions

43. Do you agree that the provisions as drafted work as intended?

44. If not, what amendments would you propose to the draft legislation and on what basis?

45. Do you agree with the provision of Tax Tribunal appeals being heard with regards to the Scottish Aggregates Tax?