Scottish Building Safety Levy: partial business and regulatory impact assessment

Executive summary

Issue and why it needs to be addressed

Cost of the Scottish Government's Cladding Remediation Programme

Intended outcomes

A Scottish BSL will provide much needed additional funding for the Scottish Government's Cladding Remediation Programme.

Options

Option 1 – Do nothing

Option 2 – Introduce a Scottish BSL to support the funding of the Cladding Remediation Programme

Sectors affected

The Scottish residential construction and real estate sector

Wider housing market

Public authorities - Local authorities, Revenue Scotland, Scottish Government

Engagement completed, ongoing and planned

Internal engagement ongoing.

External engagement ongoing through an Expert Advisory Group, a public consultation, and a programme of engagement with business and industry stakeholders. The engagement that will take place alongside the consultation will consist of roundtable events, one of which will be Ministerial led. Each roundtable will focus on different key stakeholder groups, including; developers and representative bodies in the Scottish housebuilding sector, tax and legal professional bodies, as well as Local Government and Island communities' representative bodies.

Anticipated impacts (intended and unintended, positive and negative) and mitigating actions

Positive impacts – increased revenue to support the Cladding Remediation Programme and the associated works to remediate buildings fitted with unsafe cladding.

Negative impacts – additional costs for residential property developers (which is explored in more detail in Section 3).

There may be impacts on building standards processes and local authorities if there is a need to establish additional sanctions for taxpayers in cases of persistent non-compliance.

Enforcement/ compliance

The Scottish Government is proposing that Revenue Scotland is responsible for the administration and collection of a Scottish BSL. Revenue Scotland's compliance and enforcement powers are expected to be broadly in line with those used to administer existing self-assessed national taxes, such as Land and Buildings Transaction Tax.

Consideration is being given to additional sanctions for taxpayers in cases of persistent non-compliance. This is being explored through the public consultation.

Recommendations/ implementation plans

Programme of engagement with the housebuilding industry, to identify the scale and likelihood of impacts.

Joint work with the industry to gather data relating to housebuilding.

Joint work with the UK Government to consider cross-border implications.

Work with Revenue Scotland and with Local Government and Local Authority Building Standards Scotland (LABSS) to understand potential impacts on the local authority building standards processes.

Evaluation and monitoring of implementation/ review of BRIA

The Scottish Government will develop and refine its evidence base and test the scale and likelihood of impacts through close engagement with businesses. Using the Expert Advisory Group on the Scottish BSL, this work will be validated with industry and other stakeholders before being compiled into a final BRIA ahead of any introduction of primary legislation.

We propose the policy to be considered by the Regulatory Review Group once policy on a BSL has been sufficiently developed.