Hansard

Okay. Thank you.

It is my pleasure to speak as the convener of the Finance and Constitution Committee. I put on record my thanks to my fellow committee members for the constructive manner in which they went about their deliberations on the Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Bill. I also thank the clerks, particularly Alan Hunter, who supported the committee so well during our deliberations. If only other aspects of the committee’s workload were as straightforward to navigate.

On the subject of Dickens’s characters, perhaps on this occasion Derek Mackay is Samuel Pickwick, who is said to have been

“Benevolence personified ... entirely human and credible ... Decent and determined”.

Perhaps he is the most appropriate character from Dickens as far as this bill is concerned. I had better get on now with the rest of my speech.

I highlight by way of background that, following the devolution of certain powers over taxation as a result of the Scotland Act 2012, our predecessor committee scrutinised plans to introduce the land and buildings transaction tax from April 2015. Since the implementation of LBTT, a number of changes have been made to the Land and Buildings Transaction Tax (Scotland) Act 2013, with perhaps the most significant being the introduction of the additional dwelling supplement in April 2016. That meant that individuals or couples purchasing a second residential property would be liable to pay an additional tax charge. Exemptions were put in place, though, to ensure that such buyers were not inadvertently left out of pocket—for example, by legislating to entitle people to claim a refund where they temporarily owned two dwellings while waiting for their original property to be sold.

However, it became apparent that the legislation had been drafted too tightly, which had the unintended consequence that couples in certain circumstances were treated as a single economic unit when determining whether the supplement should be levied but not when determining whether they should be reimbursed. I know that that issue has been raised with MSPs across the country. To address that anomaly, the Government laid a statutory instrument, which the committee considered and endorsed in June last year. At that time, the cabinet secretary confirmed that it was not possible for the secondary legislation to apply retrospectively, meaning that a small number of couples who had already paid the supplement were unable to claim it back. The cabinet secretary undertook to consider other legislative vehicles to effect the change, and the bill that we are debating today is the direct result of that undertaking.

Although the committee fully supported the policy intentions of a bill that is understandably narrow in scope, stakeholders raised a number of additional issues in written evidence. I will briefly address some of those comments and suggestions.

A recurring point was that the data provided to Revenue Scotland does not allow it to proactively identify taxpayers who are eligible to claim reimbursement of the supplement. The cabinet secretary acknowledged that and explained that the legal world would be well aware of the bill and would raise awareness among clients, while Revenue Scotland would publish information on its website to raise awareness and explain how to go about submitting a claim. However, the cabinet secretary accepted the fair point that attempts should be made to identify eligible taxpayers. The committee therefore invited Revenue Scotland to consider what further steps it would take to identify such people. I am grateful for its considered response, which explains that, although it is not possible to do that, it intends to use a wide range of communications activity to raise awareness of the change.

The committee is also mindful of the potential impact on the overall LBTT tax take of refunds that arise from the bill. Although the impact is likely to be relatively small, we have invited the Government to provide updates on the number of repayment claims that are made and the amounts that are repaid.

I put on the record the committee’s appreciation for the constructive engagement that we have had with the cabinet secretary and his officials in supporting our scrutiny of the bill. I welcome the comments that he made in his opening speech and the contents of his letter of 5 March in response to the committee’s stage 1 report, as well as his letter to the committee today about the group relief consultation announcement, which I think we all welcome.

The committee recommends the general principles of the bill to the Parliament.