Tax Advisory Group minutes: September 2024

Attendees and apologies

• Shona Robison MSP, Cabinet Secretary for Finance and Local Government (Chair)
• Tom Arthur MSP, Minister for Community Wealth and Public Finance
• Dr. Jim McCormick, Chief Executive of the Robertson Trust
• Cllr. Katie Hagmann, COSLA Resources spokesperson
• Aidan O'Carroll, Chair of Revenue Scotland and former Chair of the Institute of Directors in Scotland
• Charlotte Barbour, President of the Chartered Institute of Taxation
• Prof. David Heald, Emeritus Professor in the Adam Smith Business School, University of Glasgow
• Dr. Liz Cameron, Chief Executive of the Scottish Chambers of Commerce
• Stuart Adam, senior economist at the Institute for Fiscal Studies

Apologies

• Dan Neidle, Founder of Tax Policy Associates and former tax lawyer
• Prof. Mairi Spowage, Director of the Fraser of Allander Institute
• Dave Moxham, Deputy General Secretary at the Scottish Trades Union Congress

Scottish Government

• Lorraine King, Deputy Director, Tax and Revenues
• Matt Elsby, Deputy Director of Fiscal Policy and Constitution

Items and actions

Welcome and apologies

The Chair welcomed members and noted apologies from Dan Neidle, Mairi Spowage and Dave Moxham.

Minutes of last meeting & TOR updates

The Chair noted that the minutes from the previous meeting had been circulated and asked members to confirm if they were content with them. Members confirmed they were content for them to be issued

Update: Fiscal position and Programme for Government 

The Chair spoke to the context around the fiscal position and the recent Fiscal Statement on September 3rd.

The Chair invited Matt Elsby, Deputy Director of Fiscal Policy and Constitution, to update members further on the Fiscal Statement. 

Following those remarks, the Chair invited any questions from members. Members were content to proceed to the next agenda item.

Discussion: Tax Strategy 

The Chair summarised the context around the publication of the Tax Strategy, noting delays due to the MTFS and UK General Election. 

The Chair invited Fiona Thom, Head of Tax Strategy and Income Tax to present a paper on this item. 

Following the presentation, the Chair opened the discussion and invited views from members. 

The issue of growing the tax base was raised. It was noted that this could aim to bring more people into the workforce sustainably or improve the pay, and therefore tax contribution, of the lowest earners. It was further noted that data focussing on the lowest earners and the extent to which they are able to move out of low paid jobs would be welcome. 

The issue of migration was raised. It was noted that whilst focus is often on asylum seekers and refugees, there are also economic migrants who become stuck in low paid work. It was highlighted that whilst net migration to Scotland is positive, more data on the decision making of middle and higher rate taxpayers would be useful in supporting a growth in the tax base. The issue of rural migration was also raised, and the extent to which tax was a useful lever in improving mobility within Scotland. 

It was noted that tax should be considered at a systems level, including social security and housing. The issue of unintended consequences in social security was raised, and the need to be mindful of the interactions between income, tax, and benefits on a family’s overall position. 

The issue of certainty in the tax system was raised and it was highlighted that both business and local government would welcome this. 

It was further noted that, for business, the cumulative impact of policy and regulation can impact business and investor decision making. It was noted that an awareness of upcoming or planned regulation would be welcomed.

Innovation and entrepreneurship was raised. It was noted that local government often has very strong relationships with business and business groups.  It was suggested that data sources could be identified or developed which improve our understanding of investment and investor behaviour. 

The issue of creating tax policy was raised. It was noted that the characteristics of good tax policy making could be further developed in the Tax Strategy. It was noted that the Scottish Budget remains the locus for tax policy decision making and that the Strategy cannot bind the tax decisions of a future government. 

The areas of research interest in the Tax Strategy was highlighted as a positive step and a potentially useful area for the TAG to consider. In particular, consideration of what a land tax may look like from a strategic perspective. 

The Chair thanked members for a productive discussion and drew the discussion to a close.

AOB

The Chair noted the group’s next meeting is Wednesday 6th November. The Chair suggested that the group could usefully consider the impact of the UK Budget.