THE SCOTTISH PARLIAMENT has announced it is to set up its own tax agency called Revenue Scotland, which will be responsible for the collection of taxes levied by the Scottish government.
The announcement was made by finance secretary John Swinney, who said he had rejected the option of having HM Revenue & Customs administer and collect the devolved taxes.
He claimed the new body “would serve the needs of the people of Scotland at a lower cost than the UK set-up”.
HMRC had previously warned it had no obligation to enact taxes levied by Holyrood.
Swinney added that the agency could be set up as early as 2015 “in line with international best practice” and would be “operationally independent and its governance enshrined in legislation”.
The powers to levy stamp duty land tax and landfill tax will also be devolved to Edinburgh in 2015 as part of the Scotland Act, which was given royal assent this year.
Scottish government would introduce a system “that is simple to operate and digital first” with IT systems developed to “simplify processing and reduce late payment”, Swinney added.
Revenue Scotland would work alongside Registers of Scotland on stamp duty land tax and with the Scottish Environmental Protection Agency on disposals to landfill.
A consultation on the proposals and establishment of a tax consultation forum for bodies with an interest in the tax system was also announced.
Elspeth Orcharton, director of corporate and international taxes at ICAS, said: “This is the first time the Scottish Parliament has had to consider tax legislation. Today’s announcement is likely to set the scene for future tax developments.
“The tax community will study the details with great interest and ICAS will continue to engage and consult on what this would mean in practice.”
HMRC will still be responsible for the administration and collection of income tax in Scotland, even after the Scotland Act comes into force.
Committee expresses concern about costs to businesses and April 2018 implementation date
Drastically fewer offices for HMRC in the hope to reduce their running costs
An 80% increase in additional revenue for HMRC coincides with a crackdown on income tax avoidance
Laurence Field, the head of tax at national audit, tax and advisory firm Crowe Clark Whitehill outlines the 6 'unexpected items' regarding HMRC's Making Tax Digital plans