Accountability Report
The Directors’ Report
Revenue Scotland Board 2022-23
In line with paragraph 1 of Schedule 1 to the RSTPA, the Scottish Ministers are responsible for appointing between five and nine individuals to be members of the Revenue Scotland Board. One individual is appointed by Ministers as Chair. Ministers determine the period and terms of appointment of Board members and may re-appoint individuals who already are, or have been on the Board. This is subject to evidence of effective performance and their continued possession of the skills, knowledge, and experience required for the Board at the time of reappointment. Appointments are made following a public appointments exercise regulated by the Commissioner for Ethical Standards in Public Life in Scotland.
Board Members 2022-23
Aidan O’Carroll
Chair
Aidan O’Carroll is a former senior partner at EY, one of the world’s largest professional services firms, which he left in July 2020 after 35 years. Formerly Head of Tax for EY in the UK, Aidan has advised both local and global companies across a wide spectrum of tax and business issues around the world. He was formerly Scottish Chair of Institute of Directors and stepped down in May 2023. He also has a number of Non-Executive Director roles in organisations based in the UK. He has considerable experience in dealing with regulatory matters in both emerging and developed markets; he is also a regular contributor and speaker at business conferences.
Martin McEwen
Chair of the Audit and Risk Committee
Martin McEwen is a Chartered Accountant and Tax Advisor. He is the Head of Tax at SSE plc and a member of their Finance Leadership Team. He joined the company in 2008 after a number of years at PwC. He is a regular speaker on tax transparency and responsible corporate tax behaviour. He has sat on both the Scottish Taxes and the Corporate Tax Committees at ICAS.
Jean Lindsay
Chair of the Staffing and Equalities Committee
Jean Lindsay was previously the Director of Human Resources at the Forestry Commission. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and has experience in leadership, strategic people management, change management and corporate governance in the public sector. She is also a member of the Board of Crown Estate Scotland and a non-legal member of the Employment Tribunal (Scotland).
Rt Hon Ken Macintosh
Member of the Staffing and Equality Committee – appointed 1 June 2022
Ken Macintosh was the Presiding Officer of the Scottish Parliament until stepping down from elected politics in 2021. He began his working life with the BBC, serving as a senior producer and broadcast journalist on a range of news and current affairs programmes. He was elected to the first Scottish Parliament in 1999 and held a number of front bench roles before being chosen as Speaker in 2016. Ken is a member of the Privy Council as well as a Trustee of several charities.
Robert MacIntosh
Member of the Audit and Risk Committee – appointed 1 June 2022
Robert MacIntosh is Professor of Strategic Management and Pro Vice Chancellor for Business and Law at Northumbria University. He has a PhD in Engineering and his work focuses on strategy and change with senior leadership teams. He has worked with over 100 organisations and has significant experience as a chair and trustee. He is a Fellow of the Institution for Engineering and Technology, the Academy of Social Sciences and the British Academy of Management. He is currently the chair of the Chartered Association of Business Schools and was formerly the chair of the social care charity Turning Point Scotland.
Idong Usoro
Deputy Chair of Staffing and Equalities Committee – appointed 1 June 2022
Idong Usoro joined as a Board Member on 1 June 2022 and was appointed as Vice Chair on the Staffing and Equalities Committee on 11 August 2022.
Idong is the Head of Enterprise Architecture at Castle Water Limited. He is trained in Business and Computer Science with industry certifications in enterprise architecture and has worked with over 100 organisations in as a technical specialist, senior leader and trustee. He has worked across the private and public sectors in the UK, Europe and the US supporting companies with the development of software solutions, digital data and technology functions, architecture functions, and implementation of innovation processes.
His broad R&D background in the university and private sectors, provides a multi-disciplinary perspective on emerging technologies and a strong focus on innovation within Revenue Scotland’s planning. His research work has engaged both private and public organisations, innovation agencies that including UKRI/ Innovate UK, Cancer Research UK, European innovation/research institutes and the European Commission.
Additionally, he serves as a Trustee with the Abbeyfield England board, and an executive consultant to private technology companies in the immersive solutions, Fintech and life sciences sectors
Simon Cunningham
Deputy Chair of the Audit and Risk Committee
Simon Cunningham joined as a full Board Member on 1 January 2021 having previously served on the Audit and Risk Committee from 2019. He was appointed Deputy Chair of the Committee on 4 June 2023. Simon qualified as a Chartered Accountant in 1988 and was a partner in Scott-Moncrieff for many years, leading the firm’s outsourced internal audit and risk consulting services. During his time at Scott-Moncrieff, he worked with the boards and audit committees for a wide range of public sector organisations. After four years as Chief Internal Auditor at AEGON UK plc, he joined McInroy & Wood (personal investment managers) as their Director of Compliance and Group Risk, and chaired their Risk Committee for six years. He is also currently a co-opted member of the Audit & Risk Committee for the Scottish Courts and Tribunals Service. He chairs the Board of the Free Church of Scotland Pension Trustees Limited and the Free Church of Scotland’s Investment Committee.
John Whiting CBE
Former member of the Staffing and Equalities Committee until 30 June 2022
John Whiting CBE’s Board appointment concluded on 30 June 2022. He was a member of the Staffing and Equalities Committee. John also sat on an internal tax governance group. John was a nonexecutive director of HMRC until September 2019; he remained a director of the Taxation Disciplinary Board until May 2023 and is Chair of the UK’s GAAR panel; until March 2017, he was Tax Director of the UK’s Office of Tax Simplification (OTS). Other previous roles include Tax Policy Director of the Chartered Institute of Taxation, many years as a tax partner with PricewaterhouseCoopers and membership of the First-Tier Tax Tribunal.
Lynn Bradley
Former Chair and Member of the Audit and Risk Committee until 30 June 2022
Lynn Bradley was Chair of the Audit and Risk Committee until 31 December 2021. Her Board appointment concluded on 30 June 2022. Lynn Bradley is an accountant with more than 30 years’ experience in the Scottish public and private sectors. Previous roles include Director of Corporate Programmes and Performance at Audit Scotland and Chair of CIPFA Scotland. She currently lectures in the Adam Smith Business School at the University of Glasgow and is a member of the Institute of Chartered Accountants of Scotland (ICAS) Audit and Assurance panel. She is also a trustee of Cash for Kids (Radio Clyde).
Corporate Governance Report
Senior Leadership Team 2022-23
Elaine Lorimer – Chief Executive
Elaine Lorimer joined Revenue Scotland as its Chief Executive in March 2016. She is an experienced Chief Executive who has more than 25 years’ leadership experience, working at senior management and board level in the UK Civil Service in a diverse range of organisations covering regulation and operational delivery. She joined Revenue Scotland from the Law Commission of England and Wales, where she was Chief Executive. Prior to that, Elaine worked as a senior legal adviser in local government in Scotland, latterly focusing on regional transport including the privatisation of the railways and introducing alternative funding models to major investments in infrastructure.
Michael Paterson – Head of Tax
Michael Paterson joined Revenue Scotland in March 2019 and has lead responsibility for the administration and compliance of the devolved taxes, ensuring they are collected and administered efficiently and effectively. Michael has extensive knowledge and operational experience of UK taxes, particularly those dealing with international matters, resulting from 30 years as a senior tax professional with HMRC. His wide-ranging and senior tax roles have been in areas such as technical, policy, investigations and management.
Neil Ferguson – Head of Corporate Functions
Neil Ferguson has worked on devolved taxes since 2012 and been with Revenue Scotland since 2016. He has responsibility for six teams: People Services, Governance, Statistics and Management Information, Strategy and Communications, Finance and IT. Prior to his current post, he worked on the Additional Dwelling Supplement, led the Air Departure Tax programme and the development of Corporate Plans. With the Scottish Government, he was Bill Team Leader for the Land and Buildings Transaction Tax (Scotland) Bill. He also worked on the Referendum Bill and the introduction of the Home Report, which transformed the approach to the buying and selling of homes in Scotland.
Mairi Gibson – Head of Legal Services
Mairi Gibson joined Revenue Scotland in February 2020. She has been a government lawyer since 1998. Over the years she has been seconded to various posts within the Government Legal Service for Scotland including the Scottish Government Legal Directorate, Scottish Parliament and the Office of the Advocate General.
Statement of the Accountable Officer’s responsibilities
Under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000, Scottish Ministers have directed Revenue Scotland to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of Revenue Scotland and of its income and expenditure, Statement of Financial Position and cash flows for the financial year.
In preparing the accounts, the Accountable Officer is required to comply with the requirements of the Government Financial Reporting Manual (FReM) and to:
observe the Accounts Direction issued by Scottish Ministers, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
make judgements and estimates on a reasonable basis
state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the financial statements
prepare the financial statements on a going concern basis
confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable. The Accountable Officer takes personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.
The Permanent Secretary of the Scottish Government (SG), who is the Principal Accountable Officer for the Scottish Administration has designated, in accordance with sections 14 and 15 of the Public Finance and Accountability (Scotland) Act 2000, the Chief Executive of Revenue Scotland as Accountable Officer for Revenue Scotland.
The responsibilities of an Accountable Officer, including responsibility for the propriety and regularity of the public finances for which they are answerable, for keeping proper records and for safeguarding the Revenue Scotland’s assets, are set out in the Scottish Public Finance Manual.
The Accountable Officer may consult with the SG Chief Financial Officer (CFO) on any aspects of the duties applying to Accountable Officers in the Scottish Administration. The Accountable Officer must consult the CFO on any action which they consider is inconsistent with their duties on financial, regulatory or propriety grounds, and specifically where they seek written authority from the Scottish Ministers or a direction from the Board of Revenue Scotland. In practice, the Chief Executive will delegate authority widely to other employees of Revenue Scotland but cannot, on that account, disclaim responsibility. The Chief Executive is responsible for informing the Principal Accountable Officer about any complaints about Revenue Scotland accepted by the Scottish Public Services Ombudsman (SPSO) for investigation and about the response to any subsequent recommendations from the SPSO.
As the Accountable Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that Revenue Scotland’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.
I confirm that this Annual Report and Accounts, taken as a whole, is fair, balanced and understandable, and I take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.
Governance Statement
In the paragraphs below, I report on the governance arrangements in place within Revenue Scotland.
Governance Framework
Revenue Scotland is responsible for the administration and collection of Scotland’s wholly devolved taxes. The relevant powers and duties of Revenue Scotland, and of the Scottish Ministers are set out in the Revenue Scotland and Tax Powers Act 2014.
Scottish Ministers are responsible for appointing the Board of Revenue Scotland following a public appointment exercise, regulated by the Commissioner for Ethical Standards in Public Life in Scotland.
Ministers must not direct, or otherwise seek to control Revenue Scotland in the exercise of its functions but they may give guidance. This guidance must be published and laid before the Scottish Parliament unless Ministers consider that to do so would prejudice the effective exercise by Revenue Scotland of its functions. Scottish Ministers are responsible for setting rates, bands and thresholds relating to the devolved taxes, subject to the approval of the Scottish Parliament.
The Board of Revenue Scotland is collectively responsible for the leadership and direction of the organisation and for ensuring that it carries out its statutory functions effectively and efficiently. It may delegate any of its functions to an individual Board member, a committee of the Board, the Chief Executive, or any other staff member, but it will retain its responsibility for carrying out its function.
As the Chief Executive of Revenue Scotland, I am employed by, and accountable to, the Board of Revenue Scotland for the day-to-day running of the organisation and its operational performance. In this role, I seek assurance that appropriate controls are in place across the organisation, and in respect of the partners whom we rely on to support us in delivering our objectives. I can confirm that these have been in operation during 2022-23 and to the date of signing these accounts.
I am supported by the Senior Leadership Team (SLT), who oversee the day-to-day business of Revenue Scotland, with each member taking responsibility for a specific area. The SLT is made up of the Chief Executive, the Head of Tax, the Head of Corporate Functions and the Head of Legal Services.
Operation of the Board and committees
The Board is responsible for the functions and powers of Revenue Scotland and delegates authority to staff through a Scheme of Internal Delegation. The Board sets the strategic direction for the organisation, oversees Revenue Scotland’s work and monitors performance including the design and operation of risk and governance frameworks. They do this through scrutiny and, where appropriate, approval of:
corporate plans and business plans
- key strategies and policies
- regular reports, including reports relating to risk management, performance, tax compliance, business continuity, staff, health, safety and wellbeing, and changes in the devolved taxes
- scrutiny of the Annual Reports and Accounts
- reports from the Audit and Risk and Staffing and Equalities Committees
- strategic engagement with key partners and service users
I can report that during 2022-23 the Board met on seven occasions, including a strategy meeting (2021-22: eight). During this time the Board scrutinised and considered a number of specific matters including:
- decisions relating to the Scottish Landfill Communities Fund
- oversight of Revenue Scotland’s review of its future operating model and approach to hybrid working
- oversight of tax and litigation cases and the implications for the organisation following the outcomes
- strategic oversight of the development of our Tax Settlement and Litigation Principles
- reviewing the terms of reference for the Staffing and Equalities Committee, and the Audit and Risk Committee, to ensure they continue to meet the needs of the Board
- approval of revisions to governance documents, including the Scheme of Internal Delegation and the Code of Conduct for Revenue Scotland Board members.
Audit and Risk Committee
The purpose of the Audit and Risk Committee is to support the Board and Accountable Officer by reviewing the comprehensiveness, reliability and integrity of the assurances produced in support of the financial statements. The terms of reference of the committee are published on Revenue Scotland’s website within the Board’s Standing Orders.
The committee fulfils its role through:
- scrutiny of risk management arrangements
- regular liaison with internal and external audit and scrutiny of their plans and reports
- considering and monitoring of responses to recommendations from internal and external auditors and other bodies
- review of the certificates of assurance produced by management as part of the financial reporting process and the Chief Executive’s governance statement, and
- overseeing the financial reporting process
Members of the committee during 2022-23 were Martin McEwen (Chair), Simon Cunningham, Robert MacIntosh and Lynn Bradley (until 30 June 2022).
The committee is also attended by the Chief Executive, Head of Corporate Functions, Head of Legal Services, Head of Tax, Head of Governance, the Chief Accountant and representatives of internal and external audit as well as other staff as required.
I can report that during 2022-23 the committee met seven times (2021-22: five).
The committee reviewed its effectiveness, using the checklist set out in the Scottish Government’s Audit Committee Handbook, in early 2023-24 and found no issues of concern which could affect its normal function.
Staffing and Equalities Committee
The Staffing and Equalities Committee advises and provides assurance to the Revenue Scotland Board and Accountable Officer on issues relating to: people; equality, diversity and inclusion; and health, safety and wellbeing.
During 2022-23, the Revenue Scotland Board reviewed the operation of the committee and agreed to pilot changes during 2023-24 aimed at ensuring a more strategic focus for the committee.
The terms of reference for the committee are published on Revenue Scotland’s website within the Board’s Standing Orders.
Members of the committee during 2022–23 were Jean Lindsay (Chair), Idong Usoro, Ken Macintosh and John Whiting (until 30 June 2022). Staff attendees comprise the Chief Executive, Head of Corporate Functions, Head of Legal Services, Head of Tax, Head of People Services and Head of Governance. Further staff members attend as required.
I can report that during 2022-23, the committee met three times (2021-22: three) and engaged in a number of relevant matters including supporting the development and scrutiny of:
- the People Strategy and action plan
- workforce planning
- health, safety and wellbeing
- equality, diversity and inclusion.
Assurances provided to the Chief Executive
I have received written assurances from members of my Heads of Service who have responsibility for the operation and effectiveness of internal controls within the Tax, Legal and Corporate Functions teams. I can report that no significant matters were raised with me.
The 2021-22 report highlighted the need to continue to strengthen health and safety systems within Revenue Scotland. I am happy to note that progress has been made over the last year, particularly in respect of the arrangements for landfill site visits. At the time of writing, I am pleased to report that landfill site visits by Revenue Scotland staff are now able to resume. As we look ahead to the aggregates tax coming on stream, we are committed to further strengthening our health and safety controls as we become exposed to an additional high risk industry. We recognise the importance of proactively addressing potential risks and ensuring compliance with regulatory requirements in order to provide a safe system of work for our staff.
I have also received assurance from the Accountable Officer of the Scottish Environment Protection Agency (SEPA) in respect of the statutory functions delegated to them by Revenue Scotland. No significant issues were raised with me as part of this process.
For those services which Revenue Scotland receives from the Scottish Government, I have received assurance from the Scottish Government’s Chief Financial Officer in respect of financial systems, the Scottish Government’s Director for People in respect of Human Resources (HR) services and payroll systems shared with Revenue Scotland and from the Scottish Government’s Director of Digital, regarding digital corporate services shared with Revenue Scotland. No significant issues were raised with me as part of these. In conclusion, I can confirm that, based on the aforementioned written assurances received, there were no significant control weaknesses identified in the period under review.
Report on personal data incidents
Revenue Scotland manages, maintains and protects all information according to the requirements of relevant legislation, its own information policies and best practice.
Revenue Scotland has an Information Assurance Governance structure which prioritises and manages information risks.
The governance structure:
- protects the organisation, its staff and our service users from information risks where the likelihood of occurrence and the consequences are significant
- ensures adherence with statutory duties and
- assists in safeguarding Revenue Scotland’s information assets.
Revenue Scotland has a Senior Information Risk Owner (SIRO) and a number of Information Asset Owners (IAOs), who provide assurance to the SIRO that proper controls are in place. The SIRO role is to ensure information security policies and procedures are fit for purpose and are reviewed and implemented across all of Revenue Scotland’s business functions.
The IAOs are tasked with ensuring compliance with statutory duties, knowing what information assets they ‘own’ and what information they handle. They also ensure the relevant security requirements, sensitivity, importance and protocols for sharing of information assets.
During the course of the year, there were eight issues relating to minor data losses, which were reported and dealt with internally. The losses were resolved quickly, and mitigations put in place. None of the losses met the threshold of being reportable to the Information Commissioner’s Office. There were no security incidents involving any physical losses such as paper files or laptops.
Parliamentary scrutiny
As a Non-Ministerial Office, Revenue Scotland is accountable to the Scottish Parliament and, as such, can be called to appear before parliamentary committees to provide updates on operational matters, give evidence on tax related matters or provide written statements.
Revenue Scotland’s Corporate Plan, supporting legislation and this Annual Report are published documents. The Corporate Plan 2021-24, on which this document reports, was approved by Scottish Ministers and laid before the Scottish Parliament in November 2021 and this report will be laid before Parliament in November 2023.
Corporate plans, all annual reports and accounts and minutes of Revenue Scotland Board meetings are available on our website.