Scottish Building Safety Levy: partial business and regulatory impact assessment

Section 4: Additional implementation considerations

Enforcement/ compliance

The Scottish Government proposes that Revenue Scotland should act as the tax authority for a Scottish BSL. Revenue Scotland is the tax authority responsible for the administration and collection of Scotland's two devolved taxes - Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) and will be the tax authority for the upcoming Scottish Aggregates Tax (SAT). LBTT, SLfT and SAT are self-assessed taxes, where the responsibility falls to the taxpayer to complete and submit an accurate return, where required, and pay any tax due.

Designating Revenue Scotland as the tax authority would support a standardised process for devolved taxes across Scotland, providing certainty and convenience to businesses and other stakeholders in the building standards process. It would also allow for the utilisation of Revenue Scotland's experience in collecting and administering self-assessed taxes. Revenue Scotland would also be able to use the existing administrative framework for collecting national taxes - the Revenue Scotland and Tax Powers Act 2014 - to underpin the collection of a Scottish BSL.

In addition, the Scottish Tax Tribunals are in place to hear appeals against appealable decisions made by Revenue Scotland related to the fully devolved taxes.

The public consultation on a Scottish BSL seeks views on a number of enforcement and compliance areas, including questions on the following:

• the appropriateness of Revenue Scotland as the tax authority who collects and administers the tax
• the schedule of returns for a Scottish BSL
• the appropriateness of using Revenue Scotland's existing investigatory and enforcement powers in relation to a Scottish BSL
• the appropriateness of using existing arrangements in place for tax avoidance purposes
• views on a proposed dispute resolution and appeals process for a Scottish BSL.

UK, EU and International Regulatory Alignment and Obligations

Internal Market/ Intra-UK Trade

The UK and Scottish governments ran a joint consultation on devolving powers for a Scottish BSL^[11]. This consultation was informed by the UK Government's Command Paper 'Strengthening Scotland's Future', which contained criteria used to guide the UK Government's consideration of new tax devolution proposals.

As part of this consultation, respondents were asked for views on whether the devolution of a BSL to Scotland would impose a disproportionate negative impact on UK macroeconomic policy or impede the single UK market in house building.

The joint consultation response, published in April 2024^[12], noted that no evidence was provided which would suggest that devolving the proposed tax power would impose a disproportionate negative impact on UK macroeconomic policy or impede the single UK market in house building.

It is possible that where there are significant policy differences between the English and Scottish levies, then this might result in regulatory divergence. As the policy development on the Scottish and English BSL is still in development it is too early to assess this. The Scottish Government will continue to engage with the UK Government throughout the development of a Scottish BSL to ensure that any intra-UK regulatory impacts are identified and, where necessary, mitigated.

International Trade Implications

The Scottish Government does not believe the introduction of a Scottish BSL in will have implications on international trade. We will continue to consider any potential impacts from introducing a Scottish BSL on international trade and obligations as the policy develops.

EU Alignment consideration

We do not consider there to be any EU alignment implications associated with these proposals.

Legal Aid

We do not consider there to be any legal aid implications associated with these proposals.

Digital impact

The Scottish Government will consider a digital first approach to the design of the tax, in collaboration with Revenue Scotland and industry stakeholders.

Business forms

It is anticipated that businesses liable to pay the levy will be required to register for the tax and submit a tax return to Revenue Scotland which details their tax calculation and liability. The Scottish Government will work with Revenue Scotland to consider how best to test any registration and tax return forms with relevant stakeholders, ahead of introduction.