Scottish Income Tax Board minutes: January 2024

Attendees and apologies

• Deputy Director, Tax Strategy, Engagement, and Performance, Scottish Government (SG) 
• Head of Tax Strategy and Income Tax, SG 
• Income Tax Team Leader and the Single Point of Contact for Scottish Income Tax, SG
• Economic Adviser, Fiscal Analysis, Office of the Chief Economic Adviser, SG 
• Deputy Director, Income Tax Policy, HM Revenue and Customs (HMRC) (Chair)
• Senior Policy Advisor, Devolved Income Tax and the Single Point of Contact for Scottish Income Tax, HMRC 
• Head of Inheritance, International, and Devolved Analysis, HMRC 

Apologies 

• Head of Income Tax: Structure, Devolution, and Strategy, HMRC

Items and actions

Board papers update 

The board discussed the correspondence papers and approved the Q3 Finance Report.

The board approved the updated quarterly Business Intelligence Report which includes a longer time series of identification and assurance activity data.   

HMRC provided an update on HMRC’s behavioural research and publication plans.

Review of actions points 

The board reviewed the outstanding actions.  

Scottish budget 2024-2025 recap

The board discussed the Scottish Income Tax changes announced in the draft Scottish budget on 19 December 2023. The proposed changes for 2024-2025 will increase divergence between Scottish and UK Income Tax rates and thresholds further. 

The board reviewed progress on the project to implement the Advanced Rate from April 2024. 

The board commissioned quarterly updates from the Advanced Rate project. 

Third party data clash scan: second stage analysis 

HMRC’s external supplier conducted the third party data clash scan in 2023. The data clash compares HMRC’s address records with third party data to assess the accuracy of HMRC’s address data with respect to the identification of Scottish taxpayers.

HMRC analysed the data clash results by comparing unmatched records in the initial scan against current Pay As You Earn and Self-Assessment records. The analysis confirmed that HMRC correctly identifies Scottish taxpayers in 98% to 99% of active cases, which is in line with previous year’s results. 

The board agreed to run an additional data clash for a consecutive year in 2024. The board agreed to develop a set of criteria to inform decisions about when to run the data clash in future years.

Scottish Income Tax communications 

The board discussed how HMRC’s communications on Scottish Income Tax to taxpayers and employers could be more targeted. The aim is to improve understanding of Scottish Income Tax, build public awareness and promote voluntary compliance.

The board commissioned HMRC to scope out options and costs for additional Scottish Income Tax communications. 

The board agreed with the proposal for Scottish Government to develop a social media campaign to raise awareness of Scottish Income Tax. 

Scottish Income Tax annual stakeholder event 

The first Scottish Income Tax annual stakeholder event took place on 12 October 2023 in Edinburgh.

The board discussed HMRC’s ongoing work to triage the feedback received from external stakeholders on the issues and opportunities of the administration of Scottish Income Tax. HMRC is using the feedback to explore ways to improve the Scottish taxpayer customer journey. 

The board commissioned HMRC to review the guidance advisors use to respond to Scottish Income Tax customer queries. 

The board agreed that the next Annual Stakeholder Event will be held in Autumn 2024. 

Compliance 

The board discussed the increasing divergence between Scottish and UK Income Tax rates and the potential impacts this may have on taxpayer behaviour and on Scottish Income Tax compliance.

The board agreed to establish a compliance working group to further develop a robust assessment of Scottish Income Tax non-compliance risks in light of this increasing divergence. 

Forward look 

The board reviewed its 2024 to 2025 forward look. 

The board agreed to include additional agenda items to discuss Scottish Income Tax communication activities and compliance at the next board meeting. 

Any other business and close 

No other business

The chair closed the meeting.