Report from Audit Scotland says Scottish Electronic Tax System is in place to take on devolved financial powers
Revenue Scotland has received the approval of the national auditor for its implementation of the Scottish Electronic Tax System (SETS) to support its new powers for tax collection under devolution.
Audit Scotland has published a report, Implementing the Scotland Act 2012: An update, which says the organisation implemented the collection of the first two taxes on time, getting the IT and people in place to collect and manage the revenues.
Although the cost of £5.5 million was £1.2 million more than the original estimated, largely due to the need for additional staff during the set-up, Revenue Scotland is now applying the lessons it learned in implementing further taxes.
In addition, the report says the Scottish Government and HM Revenue & Customs are now working well together to prepare for the introduction of the Scottish rate of income tax in April of next year. The estimated cost of this has been reduced by £10 million to between £30-35 million.
Revenue Scotland already has responsibility for collecting the land and buildings transaction tax and landfill tax, with combined estimated revenues of almost £500 million, under the Scotland Act 2012. Next year it is due to take on the Scottish rate of income tax, with estimated revenues of £4.9 billion, and under the Scotland Bill it could extend its income tax powers while also becoming responsible for air passenger duty and the aggregates levy.
An Audit Scotland report published in December 2014 highlighted delays in procuring SETS, and warned it might not be operational by April of this year as planned. But Revenue Scotland prioritised phases of the implementation towards he collection of the first two taxes, and all of the online forms were in place for when taxpayers needed to use them.
In the first month of operation, 98% of land and buildings tax returns were submitted online, compared with a target of 90%, and this has remained steady.
Caroline Gardner, auditor general for Scotland, said: “Good project management involves recognising emerging risks and responding quickly to address them. Revenue Scotland effectively managed the risks highlighted in my previous report and successfully delivered the devolved taxes from April this year.”
Some arrangements for the new taxes are still being developed as the Scottish and UK governments are yet to agree on a new fiscal framework.
Image from Audit Scotland, Open Government Licence v3.0