Questions over new Scotland Bill tax powers

SNP MSP Mark McDonald has questioned HMRC’s approach to the tax powers being devolved in the Scotland Act, after their evidence to the Finance Committee indicated that they could veto any changes from the status quo, and would even charge up to £8m a year just to stand still.

Responding to Mr McDonald’s questions at the Committee this morning, Sarah Walker, Deputy Director and Head of Devolution Team at HMRC said that, if the Scottish Government wanted to alter the stamp duty or landfill taxes, HMRC could:
• Change the cost of administration
• Delay implementation
• Refuse to administer them

Asked about the cost of doing nothing once the income tax powers are being devolved, Ms Walker put the annual administration cost at between £3m and £8m – the guideline figure provided in the Regulatory Impact Assessment.

Mr McDonald has questioned whether HMRC will actually deliver a different tax system if the Scottish Parliament chose to make changes:

“HMRC’s answers to the Committee have themselves thrown up many more questions.

“The point of taking responsibility for taxation is to be able to make it fit for Scottish circumstances. It seems HMRC would not be willing to take that step.

“If they can in fact refuse or delay implementation, then the role of HMRC in implementing these taxes has to be seriously questioned.

“HMRC would not be able to say no to the UK Government. It raises questions over the operation of these taxes in the future that they can say no to Scottish Ministers.

"When HMRC expect the Scottish Government to pay up to £8m for the collection of just one tax it seems ridiculous that they could then refuse to implement them.

"If we're going to have devolution of tax powers, let's have real devolution."

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