New Scottish Tax System Under Independence

11th December 2012

Finance Secretary John Swinney has today launched a consultation on establishing Revenue Scotland to administer taxes devolved under the Scotland Act 2012.

The consultation is the next step in enhancing the responsibility of the Scottish Parliament for taxation and enshrining the independence of tax collection in Scotland.

Central to the consultation is the creation of Revenue Scotland to administer the Land and Buildings Transaction Tax, the proposed Landfill Tax and the framework of powers and responsibilities needed ensure efficient collection of the devolved taxes, and any future taxes brought under the Scottish Government’s control.

The consultation aims to ensure Revenue Scotland is one of the world’s most effective and efficient tax collection systems, offering real certainty to tax payers.

Finance Secretary John Swinney said:“The Scottish Government intends to establish Revenue Scotland as a separate, modern, efficient and responsive tax authority that will operate taxes in a way that responds to Scotland’s priorities and needs.

“I want to build a firm foundation for taxation in Scotland, In Revenue Scotland we will build a tax authority and tax system that works effectively to meet the needs of our businesses and citizens, and which can accommodate a future where we expect Scotland to collect a much wider range of taxes.

“This Government will take a distinctly Scottish approach to taxation, and we will take a firm approach to tax avoidance in relation to the devolved taxes. Revenue Scotland will learn from the best in the world.

"As part of our plans to build confidence in Scotland’s tax system I will chair a Tax Consultation Forum, a strategic group to consider the principles of a fair and effective Scottish tax system. Alongside that, I have asked Revenue Scotland to establish a collaborative group involving a wide representation from tax professionals and others with an interest in working together to shape the operation of the tax system in Scotland.

“These proposals for tax management maintain the momentum established in our consultation on Land and Buildings Transaction Tax and on Landfill Tax, and by the introduction of the Land and Buildings Transaction Tax Bill last week.

“I encourage everyone with an interest to read and respond to this consultation. These proposals form an important part of Scotland’s new powers. In finalising the tax management legislation that will follow in the course of 2013, we want to draw on the experience and knowledge of tax matters that is available in Scotland and lay solid foundations for future tax services”

The consultation proposes a General Anti-Avoidance Rule and asks for views on how it should be structured for maximum effect, and a Disclosure of Tax Avoidance Schemes rule.

Stamp Duty Land Tax, which Land and Buildings Transaction Tax will replace in Scotland from April 2015, has been subject to aggressive avoidance schemes on a UK basis. Strong anti-avoidance measures are essential to make sure that tax due is collected.

The consultation sets out a framework of taxpayer obligations and safeguards to protect their interests and will provide clear and accessible ways for taxpayers to challenge decisions or to complain.

Revenue Scotland will also publish summary data about disputes and complaints received each year, how it has responded and what it has learned that will help it improve its operations in future.

The Tax Management Bill consultation is the last of three consultations seeking views on the Scottish Government’s proposals for establishing a tax system to meet Scotland’s needs from 2015 onwards.

Revenue Scotland will not collect Council Tax or Non-Domestic Rates, which are local taxes already collected in Scotland, nor the Scottish Rate of Income Tax, which will be collected by HM Revenue and Customs.

See the Consultation on Scottish Taxes at
http://www.scotland.gov.uk/Consultations/Current