Public appointment: Members reappointed to Revenue Scotland
The Minister for Public Finance, Planning and Community Wealth, Tom Arthur, today announced the reappointment of Jean Lindsay and Martin McEwen as members of Revenue Scotland’s Board.
The Minister for Public Finance, Planning and Community Wealth, Tom Arthur, today announced the reappointment of Jean Lindsay and Martin McEwen as members of Revenue Scotland’s Board.
Three new members have been appointed to the Board of Scotland's tax authority, Revenue Scotland.
The appointment of previous Presiding Officer of the Scottish Parliament (2016-21) Rt Hon Ken Macintosh, digital transformation and emerging technologies expert Idong Usoro, and Robert MacIntosh, Professor of Strategic Management and Pro Vice Chancellor for Business and Law at Northumbria University, have today been announced by the Minister for Public Finance, Planning and Community Wealth, Tom Arthur.
Welcome to Revenue Scotland’s Equality Mainstreaming Progress Report 2022.
In March 2020, Revenue Scotland published a four year Equalities Mainstreaming Report (our 2020 Report) summarising our commitment to equalities and our approach to achieving our equalities outcomes over the period 2020-24.
At the time of that Report, we couldn’t have known the effects that the COVID-19 pandemic would have on individuals and organisations across the globe. Our service users, services and staff have been affected too.
As public health restrictions are eased, we in Revenue Scotland have reconsidered the equality, diversity and inclusion aspirations and outcomes which we set ourselves in our 2020 Report and have decided that they hold good.
It is against that context that this Report outlines the progress we have made thus far and repeats our firm commitment to developing and embedding equality, diversity and inclusion (EDI) in our organisation’s culture and behaviours.
In our 2020 Report, we recognised that this work does not belong to a single group or network, but rather it needs to be embedded by everyone and in everything we do. That continues to be our ethos.
For my part, the role which senior leaders play in developing an inclusive culture and in striving to have equalities considerations at the heart of our operations, is one I and my senior team take seriously. That is why I am particularly pleased to make, on behalf of Revenue Scotland, the commitment asked of public bodies in relation to race equality in employment. I also welcome the introduction in our Corporate Plan for 2021 – 2024 a new Key Performance Indicator (KPI 8) expressly in relation to equalities. We are ready to be held to account.
The major elements of our 2020 Report related to our website and people strategy. Considerable progress has been made on these and other areas. This Report sets out how we have taken our equalities obligations forward across those activities, including progress with regards to our specific commitments.
We are committed to making a positive difference.
Elaine Lorimer, Chief Executive
The Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2022 has now been approved by the Scottish Parliament and came into effect on 1 April 2022. As a result, taxable disposals made or treated as made on or after 1 April 2022 will be subject to the following rates of SLfT:
Revenue Scotland will be updating the online tax collection system (SETS) on Friday 28 January 2022. This update will introduce a number of changes and enhancements to both the SETS portal and also internal back-office functionality. Introduction of this important update will require a short period of downtime.
** The SETS portal will be unavailable to all users and for all services on Friday 28 January from 18:00 – 21:00. **
Summary details of new functionality being introduced to the SETS portal:
The purpose of this appendix is to explain how Revenue Scotland’s monthly LBTT statistics, quarterly SLfT statistics and annual statistics (this publication) relate to the revenue figures that appear in the Devolved Taxes Account in Revenue Scotland’s Annual Report and Financial Statements (referred to in this annex as the ‘Annual Report’), as the figures are produced on a different basis.
Appendix B (i) - comparison of LBTT statistics with published accounts
Whereas the figures in the Annual Report are, by their nature, fixed for a given year (at the point at which the accounts are closed), the published statistics are updated on a monthly basis with changes largely reflecting ADS reclaims (and some other amendments) which have been received after the original LBTT tax returns were submitted.
The Annual Report and published statistics are both based on the date the LBTT return is submitted but with some adjustments made to the Annual Report19 to accrue revenue for LBTT returns (and claims for repayment of ADS) received in April and May (after the end of the financial year) with an effective date (or sale date for the previous main residence) relating to the previous financial year or earlier. These April/May adjustments typically result in relatively small differences between the Annual Report and published statistics, although the difference was more pronounced in the first year of LBTT (2015/16) because there were no “reverse accruals” relating to the previous year.
Differences in reported figures are mainly due to the different treatments of claims for repayment of ADS in the Annual Report and published statistics. This annex focuses on differences arising due to the different treatments of claims for repayment of ADS and is intended to help the reader make meaningful comparisons between the two sources of financial information.
The published statistics allocate claims for repayment of ADS to the period in which the LBTT return (with ADS declared due) was originally submitted. The accounts published in the Annual Report typically allocate claims for repayment of ADS to the accounting year in which the claim for repayment was received. For example, a claim for repayment of ADS received in June 2019 relating to an LBTT return originally received in March 2019 would be allocated to March 2019 (2018/19) in the published statistics and to 2019/20 in the Annual Report. This repayment could not be allocated to 2018/19 in the accounts because the 2018/19 accounts were closed as at 31 May 2019.
Table 16: LBTT excluding ADS and gross ADS declared due and the value of ADS repayments claimed by year the LBTT return/claim for repayment was received and the year the claim relates to
Year | £ Millions | Devolved Taxes figure for LBTT | ||||||||
a) LBTT excluding ADS | b) Gross ADS |
Value of ADS repayments claimed Year claim relates to |
Net LBTT (a+b+c) | |||||||
2016/17 | 2017/18 | 2018/19 | 2019/20 | 2020/21 | c) All | |||||
2015/16 | 415.8 | 415.8 | 424.9 | |||||||
2016/17 | 389.7 | 104.5 | 13.3 | 13.3 | 480.9 | 483.6 | ||||
2017/18 | 461.5 | 124.3 | 12.3 | 17.1 | 29.4 | 556.4 | 557.3 | |||
2018/19 | 457.1 | 130.4 | 1.6 | 13.0 | 18.6 | 33.1 | 554.4 | 554.2 | ||
2019/20 | 478.5 | 166.4 | 0.0 | 1.6 | 15.2 | 23.9 | 40.7 | 604.2 | 597.4 | |
2020/21 | 398.8 | 156.6 | 0.0 | 0.1 | 2.0 | 19.3 | 23.1 | 44.5 | 510.9 | 517.4 |
Notes:
1. For example, a claim for repayment of ADS received in 2017/18 relating to an LBTT return (with ADS declared due) originally received in 2016/17 would relate to 2016/17 (i.e. the year the LBTT return was received) 2. Revenue Scotland Annual Report and Financial Statements. See: https://www.revenue.scot/about-us/publications/corporate-documents 3. All figures are as at the end of the relevant financial year and have not been revised
Key figures in Table 16 that help illustrate the different treatment of claims for repayment of ADS are the £2.0 million and £19.3 million of claims for repayment of ADS received in 2020/21 relating to LBTT returns initially received in 2018/19 and 2019/20, respectively (and to a lesser extent, the £0.1 million relating to 2017/18). In the published statistics, these claims do not result in any adjustment to the net ADS declared due in 2020/21. However, the net ADS reported in the statistics against 2018/19 and 2019/20 is revised (reduced) to reflect these claims as they relate to ADS originally declared on LBTT returns received in those financial years.
In the Annual Report, these repayments are reported as reductions in revenue in 2020/21 as they were received after the accounting periods for 2018/19 and 2019/20 were closed, and hence the accounts for 2018/19 and 2019/20 are not revised. Therefore, to compare the published statistics for LBTT relating to 2020/21 (as at the 31st March 2021 20) with the LBTT revenue reported in Revenue Scotland’s 2020/21 Annual Report (accounts), the ADS repayment claims received during 2020/21 relating to earlier year (£0.1 million for 2017/18, £2.0 million for 2018/19 and £19.3 million for 2019/20) should be deducted from the statistics21.
Table 16 shows that the ‘Devolved Taxes figure for LBTT’ in Revenue Scotland’s accounts and the ‘Net LBTT’ figure taken from the published statistics (adjusted for ADS reclaims in previous years, as discussed above) can broadly be reconciled. There are some other reasons for differences, but these are generally more minor and it is not practical to adjust the statistics for all possible differences.
The most significant of these is the impact of the accounting ‘accruals process’ which attributes revenue in the first 2 months of the accounting year (April and May) to the previous financial year if the ‘effective date’ of the relevant transaction was before 1 April. For every financial year there is revenue coming in from April and May of the following year (accruals) and revenue subtracted (reverse accruals) from April and May of the year in question which was included in the accounts of the previous year.
The accruals and reverse accruals often roughly cancel out, but for 2015/16, 2019/20 and 2020/21 there were more noticeable difference which in turn resulted in more significant differences between ‘Net LBTT’ and ‘Devolved Taxes figure for LBTT’ in Table 16.
For 2015/16, no LBTT revenue where the tax returns were received in April or May 2015 were accrued into 2014/15 in the annual accounts (as LBTT was only introduced in April 2015), but 2015/16 included some revenue for returns received in April and May 2016 with effective dates before 1 April 2016.
For 2019-20, accruals from April and May 2020 (into 2019/20) were reduced as a result of the impact of the COVID-19 pandemic which significantly impacted LBTT revenue in late March and April/May 2020. This resulted in a lower figure in the accounts (£597.4 million) than in the net figure shown in Table 16 (£604.2 million), a difference of nearly £7 million.
The opposite effect is seen for 2020/21 where the accrual into the accounts (from April/May 2021 into 2020/21) outweighs the accrual from April/May 2020 into 2019/20. In this case the figure in the accounts for 2020/21 (£517.4 million) is around £7 million more than the net figure in Table 16 (£510.9 million).
Appendix B (ii) – comparison of SLfT statistics with published accounts
Table 17: Comparison of SLfT declared due reported in Revenue Scotland statistics with SLfT revenue reported in the Revenue Scotland Annual Report and Financial Statements
Year | £ Millions | |
SlfT declared due (in statistics) | SLfT revenue net of repayments, excluding penalties & interest and revenue losses (in accounts) | |
2015/16 | 149.3 | 147.0 |
2016/17 | 148.0 | 149.1 |
2017/18 | 146.6 | 148.0 |
2018/19 | 141.3 | 148.5 |
2019/20 | 118.6 | 119.0 |
2020/21 | 106.3 | 106.5 |
Notes:
1. Revenue Scotland SLfT Official Statistics.
See https://www.revenue.scot/about-us/publications/statistics/scottish-landfill-tax-statistics
2. Revenue Scotland Annual Report and Financial Statements.
See https://www.revenue.scot/about-us/publications/corporate-documents
Table 17 compares the SLfT declared due reported in Revenue Scotland Official Statistics with the SLfT revenue figures reported in Revenue Scotland’s Annual Report.
These statistics are reported in relation to the quarter in which the landfill disposal took place. For example, if a landfill operator submits an SLfT tax return in August 2018 relating to the quarter April - June 2018, the tax declared due is reported against that quarter (i.e. April - June 2018). Landfill operators have 12 months from the “relevant date” to amend their tax return and Revenue Scotland SLfT Statistics are revised up to 12 months after the quarter in question. If additional tax is declared, or identified through Revenue Scotland compliance activities, after this 12 month period, the statistics are not revised. This is to minimise the risk of disclosing Protected Taxpayer Information by updating tonnages and revenues by quarter, potentially showing changes relating only to single operators, or very small numbers of operators.
The Annual Report (accounts) reports revenue against the year in which the revenue was realised, with accrual adjustments in April and May. Unlike the statistics, any additional revenue (or reductions in revenue) realised during a financial year (but potentially relating to earlier years) will be reported as revenue in the accounts during that year and may lead to a difference between SLfT reported in the statistics and the accounts.
19 The Annual Report and Financial Statements are produced to comply with the accounting principles and disclosure requirements of the Government Financial Reporting Manual.
20 See LBTT, March 2021 https://www.revenue.scot/about-us/publications/statistics/datasets
21 Note – the figures of £0.1 million, £2.0 million and £19.3 million for 2017/18, 2018/19 and 2019/20 can be estimated from the statistics by differencing the net ADS statistics published for March 2021 with the net ADS statistics published for March 2020.
The purpose of this appendix is to explain the basis on which Revenue Scotland’s LBTT statistics are produced, and to demonstrate that data based on the date of submission is similar in value and trend to data on an effective date18 basis, except at the ends of time series and near policy changes.
Revenue Scotland’s monthly LBTT statistics and the data in this publication are based on the date the LBTT return is submitted. Generally this is different from the effective date as taxpayers have 30 days from the effective date to submit their LBTT return. It can take up to eight weeks from the effective date for the majority (99 per cent) of LBTT returns to be submitted, whereas no such time lag exists for data produced by date of submission. Revenue Scotland is aware of interest in data by effective date but there are good reasons to publish statistics by the date the LBTT return is submitted.
Figure 30: Proportion of LBTT returns received by the number of weeks between submission and effective date
Figure 30 shows the proportion of LBTT returns received by the number of weeks between the date of submission and the effective date. The first category (<1 week) represents 0 to 6 days (inclusive), the second category (1-2 weeks) represents 7 to 13 days (inclusive), and so on.
Figure 30 shows that 74 per cent of LBTT returns are submitted within one week of the effective date, 97 per cent are received within four weeks of the effective date and 99 per cent are received within six to eight weeks of the effective date. This data is for LBTT returns (excluding reviews of a lease) received between 1 April 2015 and 31 March 2021. This pattern has been very similar from year to year, hence 2020-21 is not shown separately.
If Revenue Scotland was to publish data by effective date, to minimise revisions (due to receipt of LBTT returns relating to property transactions that took place in the specified month), it would seem reasonable that around two months would need to be allowed to pass from the month end before statistics relating to that month could be published. This would ensure that around 99 per cent of LBTT returns with an effective date relating to that month had been received.
For example, Revenue Scotland could be reasonably confident that 99 per cent of LBTT returns with an effective date in March 2021 had been received by 31 May 2021. A small number of LBTT returns with an effective date in March 2021 would be expected to be submitted in June 2021 or later which would result in revisions to the data for March 2021 (if the data was extracted from the tax system and included in a publication by effective date after 31 May 2021).
Figure 31: Number of LBTT returns received by month of submission and effective date
Figure 31 shows the number of LBTT returns (excluding reviews of a lease) received, both by month of submission and by month of effective date. There are some significant differences between the two series for specific months but overall they are similar in terms of value and trend, with no obvious time lag. Where large differences occur, these can in some cases be explained in terms of the introduction of a policy change which relates to specific effective dates.
For example, there are large differences between the two series in March and April 2016. This is likely to have been due to forestalling ahead of the introduction of ADS in April 2016. The number of LBTT returns with an effective date in March 2016 is approximately 2,100 higher than the number of LBTT returns submitted in March 2016, and the number with an effective date in April 2016 is approximately 1,600 lower than the number submitted in April 2016. This reflects the fact that there was a financial incentive for taxpayers to conclude property transactions in March 2016 (before the introduction of ADS). Many transactions were concluded at the very end of that month, with LBTT returns for some of these transactions then being submitted in early April.
In the first month of the series, namely April 2015, the number of returns on an effective date basis is higher than the number of returns based on the date of submission. This reflects the introduction of LBTT in April 2015. There were no LBTT returns submitted in April 2015 with an effective date in March 2015 as these property transactions were subject to UK Stamp Duty Land Tax. However some of the transactions with an effective date in April 2015 will have been submitted the following month, hence reducing the number submitted in April (when compared to those with an effective date in April).
It is worth noting that the Scottish Fiscal Commission (SFC) typically requests data by effective date, which it uses to produce and evaluate forecasts of LBTT revenue. The data provided allows the SFC to more accurately examine the impact of significant events, e.g. policy changes. The data includes LBTT returns with an effective date up to and including the month two months prior to the date on which the data was extracted from the tax system. Revenue Scotland subsequently publishes the data provided to the SFC on the LBTT data requests section of its website.
Land and Buildings Transaction Tax Statistics | Revenue Scotland
18 Typically the effective date of a land transaction is the date that the land transaction is completed. For further information on the effective date see the guidance published by Revenue Scotland. https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/how-taxworks/lbtt1004