Audit Scotland questions readiness for new land transaction tax
Delays in recruiting staff and procuring IT systems at the new Revenue Scotland authority have led to an "increased risk" to the effective management of the taxes to be devolved to Scotland from April 2015, according to a report by Audit Scotland published today.
The Government watchdog notes that Revenue Scotland is now developing contingency plans to ensure the introduction of the land and buildings transaction tax, and Scottish landfill tax, from 1 April.
It recognises however that the Scottish Government established clear structures for managing the setting up of Revenue Scotland and that "there are now well-developed project plans for implementing the devolved taxes".
The report recommends that Revenue Scotland should closely monitor progress on recruitment to the operational team, and clarify what need to be done in relation to IT systems, to inform its decision on whether to implement its contingency plans; and ensure that the points at which contingencies would be activated allow sufficient time for effective tax collection from 1 April 2015.
It comments: "Due to the tight timescales, Revenue Scotland is prioritising the development of the part of the IT system that it will use to process tax returns. The public-facing part of the system through which people will submit their tax returns online will be developed after this, which may be after April 2015. The increasingly tight timescales have reduced the time available to:
- •implement the full IT system and to ensure it is compatible with the Scottish Government’s accounting system (SEAS) and relevant IT systems in RoS [Registers of Scotland];
- test the system and fix any potential problems before the taxes take effect on 1 April 2015;
- train staff in Revenue Scotland, RoS and SEPA and provide guidance to those who will be affected most, such as solicitors and landfill operators."
A further concern is expressed in relation to collection of the Scottish rate of income tax from April 2016. With only one person currently allocated to this project, the report calls on the Scottish Government to
ensure there are enough appropriately skilled people in place to support the successful implementation of its responsibilities from the due date.
Finance Secretary John Swinney claimed that Revenue Scotland was "on track" to manage the collection of the new taxes.
He commented: “Revenue Scotland has in place a team with expert legal, financial, leadership and operational tax experience, and the detailed phased recruitment plan to deliver the necessary operational staff is progressing on track.
“Technical guidance on the two taxes is currently being consulted on with external stakeholders, and future users of our online tax system are currently being recruited to help us ensure it is user-friendly, effective and efficient.
“Development of IT is proceeding well and is on track to be completed in good time for the rollout of tax collection in Scotland this April.
“We are closely monitoring Revenue Scotland’s progress ahead of its go-live date in April. I am confident we have robust plans in place to ensure smooth delivery of the service and it is heartening to see this thorough planning acknowledged by Audit Scotland.”