More progress needed to ensure effective management of new tax powers for Scotland

Delays in hiring staff and procuring an IT system have increased the risk that new taxes for Scotland will not be effectively managed when they come into force next year.

Audit Scotland reports today on the Scottish Government's progress in preparing for the implementation of the Scotland Act 2012. The Act will introduce the Land and Buildings Transaction Tax (replacing the current stamp duty arrangements), Scottish Landfill Tax and other financial powers for the Scottish Government from 1 April 2015.

Caroline Gardner, Auditor General for Scotland, said:

"The implementation of the Scotland Act 2012 is a large and complex task that will change the landscape for public finances in Scotland, increasing fiscal autonomy and strengthening the accountability of the Scottish Parliament.

"The Scottish Government successfully developed the legislative framework for the devolved taxes, but it must ensure that staff and systems are fully in place to manage the increased responsibilities that the Scotland Act brings."

The Scottish Government established clear structures for managing the set-up of the new tax authority, Revenue Scotland, and there are now well-developed plans for implementing the devolved taxes. However, there have been delays in putting the required staff in place to deliver the overall programme, and in procuring the IT system needed to collect and administer the taxes.

These delays have increased the risk that the IT system may not be fully functioning by 1 April 2015 and that Revenue Scotland won't have the required operational expertise in place by then. This could result in tax payments taking longer to process, and increased costs of collection.

The report recommends that Revenue Scotland closely monitors recruitment to its operational team and development of the IT system. This will allow it to decide whether to implement its contingency plans, to help ensure effective tax collection from 1 April 2015.