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John Mason SNP Committee

Mr Clark mentioned HMRC, and Mr Thomson then said that it was “a guddle”. That is concerning because, from what we understand, we will be dependent on HMRC in relation to income tax, corporation tax and all sorts of revenues. We understand that the Office for Budget Responsibi...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

That is fair enough. I am not totally reassured, but there you go.Obviously, the relationship will change; you currently just collect money for HMRC, whereas in the future ROS and revenue Scotland will be an equivalent of HMRC in some ways, albeit smaller. I hope that HMRC wil...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

That is interesting, because my main question is to ask about the relationship with HMRC at the moment, and how you see it developing. At the moment, you are, technically, agents for HMRC—you are collecting tax—and that relationship will be quite important over the transition ...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

I agree that the relationship is important. However, it does not encourage me to hear that HMRC does not know how many inquiries it has about SDLT and how many of them come from Scotland. That sends a warning signal for the future that things might not be all that smooth. I ha...

John Mason SNP Committee

We have discussed HMRC with witnesses, and have heard about various experiences. We have heard that the country’s tax rules are complex, and that there are lots of books on that. We have also heard that HMRC is “a guddle”. I do not know whether you are familiar with that word.

John Mason SNP Committee

I think “mess” could be used instead. The committee has wondered how much we can depend on HMRC.Most of what I know about the Office for Budget Responsibility is good, but I believe that it has only 17 members of staff, which is not a lot. How much work has been done to prepar...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

My final point is still to do with HMRC, but relates to the question of certainty. The point has been made that there should be clear guidance about all taxes, and specifically about the one that we are discussing. We can also take up that issue with revenue Scotland in due co...

John Mason (Glasgow Shettleston) (SNP) SNP Committee

Scotland Act 2012

A major player, which is has been mentioned briefly, is HMRC and the Scottish Government’s relationship with it, especially as regards the handling of the Scottish rate of income tax. I assume that that relationship is developing between the Scottish Government and HMRC. How w...

John Mason SNP Committee

Landfill Tax (Scotland) Bill: Stage 1

I am interested in that. HMRC has a slightly ambiguous position at times as to whether it is maximising tax or just sticking to the rules. HMRC’s history has been of going beyond the law and trying to increase the tax beyond what the law says. You would not see revenue Scotlan...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

HMRC is talking about switch-off costs in that just to stop having SDLT will involve extra costs. I do not know whether you have been involved in that or have had discussions about it. It is just that—again—I am nervous that we will have costs landed on us as a result of HMRC ...

John Mason SNP Committee

Scotland Act 2012

My next question is on a slightly different issue. As I understand it from our consideration of who would operate the replacement for stamp duty land tax—the land and buildings transaction tax—HMRC could have operated the system but the Government decided to go ahead with reve...

John Mason SNP Committee

Scotland Act 2012

Before the convener comes in, I just comment that Scottish taxpayers are actually paying HMRC, so I presume that you have responsibilities to both Governments.If another new tax was introduced, which the Scotland Act 2012 provides for, would HMRC be open to operating it?

John Mason SNP Chamber

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

That question is not quite on subject. Given that Calman proposed a system of block grant reduction that would have damaged Scotland, I have to say that I am not a fan.I return to the tax itself. How we implement it will set a precedent for future taxes. The cabinet secretary ...

John Mason (Glasgow Shettleston) (SNP) SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

We have the £16.7 million in costs that the convener referred to, which HMRC quoted for, and the £3.5 million in additional costs for new activity. If we had gone with HMRC, is it the case that we would still have had the extra £3.5 million?

John Mason SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

That is helpful.Earlier, we took evidence on the financial memorandum and, in particular, on the point that, on the basic costs, which I accept were set out some time ago, HMRC’s quote was somewhat higher than revenue Scotland’s. Since then, things have developed and we are do...

John Mason SNP Committee

Further Fiscal Devolution

Finally, HMRC and Revenue Scotland have already been mentioned. When we put out the bids for the previous taxes, it seemed that we could do it more cheaply than HMRC could. That makes me wonder whether there would be an option to simplify the tax system, although you said that...

John Mason SNP Committee

Further Fiscal Devolution

LBTT is, in effect, a completely new tax, and Revenue Scotland will be starting with it. If it was income tax, we would be starting from where we are. Presumably, one option—rather than just transferring everything to Revenue Scotland—is to split HMRC and to take a chunk of HM...

John Mason SNP Committee

Devolved Taxes Implementation

I am still a little bit confused about the total costs—perhaps that is my failing—so I wonder whether you could clarify the matter. In the spring 2014 report, which I think was published in March, reference was again made to the £16.7 million quote from Revenue Scotland, compa...

John Mason SNP Committee

Draft Budget Scrutiny 2015-16

Thank you. I am concerned as well. At the time we were considering the Revenue Scotland and Tax Powers Bill, the initial quote for running Revenue Scotland was £16.7 million, whereas HMRC quoted a figure of £22.3 million—in other words, a difference of £5.6 million. Over time...

John Mason SNP Committee

Further Fiscal Devolution

As I understand it, HMRC is going to play around with the codes in the meantime, rather than having a separate system with different rates or bands. If we did something dramatic, such as have income tax rates of 10, 20, 30, 40, 50 and 60 per cent, that would be very different ...

John Mason SNP Committee

Fiscal Framework

I wonder whether that relates to what was said earlier about the OBR having the appearance of being independent. In fact, HMRC told us that most of the OBR’s information comes out of HMRC. The OBR is not really that independent, but it appears to be. Is that the important thing?

John Mason SNP Committee

Fair enough. My final question is for Mr Hogg, who talked about guidance from HM Revenue & Customs and the fact that Revenue Scotland is not following HMRC guidance. Given that our law is slightly different, should Revenue Scotland be following HMRC guidance?

John Mason SNP Committee

Fair enough. I accept that. For me, one of the fundamental differences is that the general anti-avoidance rule is slightly different under Revenue Scotland to what it is under HMRC. Even though a little bit of the detail of the legislation might be the same, the overall pictur...

John Mason SNP Committee

Would you like more analysis? If the data comes from, say, HMRC, would you like HMRC to do more analysis on it, rather than just give you raw data?

John Mason (Glasgow Shettleston) (SNP) SNP Committee

Scottish Fiscal Commission (Forecast Evaluation Report)

I have a question on the data. It is three years since I was previously on the committee so things might have changed a little bit, although I see that Dame Susan Rice is still here. When I was on the committee previously, the problem was that the data was just not there, and...

John Mason SNP Committee

National Care Service (Scotland) Bill: Financial Memorandum

The convener mentioned VAT. You said that the UK Government or HM Revenue and Customs would take a decision on that and that you were aware of what was going on. I want to press you on that. Regardless of what HMRC decides to do, is it possible to design a set-up that will mea...

John Mason SNP Committee

My question follows on from what Stewart Maxwell said. You use the word “accountability” quite a lot in your written submission. What is your argument for saying that the bill will make the Scottish Parliament more accountable? What we have heard so far this morning seems to b...

John Mason SNP Committee

Those are some of the practicalities, but when HMRC comes out with total figures, can we trust them?

John Mason SNP Committee

Is HMRC collecting the tax that it should be collecting?

John Mason SNP Committee

In that relationship, will Scottish ministers be able to question the OBR and HMRC directly, or will they have to go through the UK Government?

John Mason SNP Committee

So, the Scottish Parliament can hold HMRC to account.

John Mason SNP Committee

I was interested in some of the comments in the Northern Ireland report, particularly those in paragraph 14, which says that although giving Northern Ireland power over corporation tax“would give rise to administration costs for HMRC”that would not be a major problem. Indeed, ...

John Mason SNP Committee

I was going through a list of things that I wanted to ask about. I will ask questions about just two more issues, if I may: borrowing powers and one other. I had intended to ask about HMRC, as well, but we have had some comment on that already.

John Mason (Glasgow Shettleston) (SNP) SNP Committee

Partly in response to what has just been said, I add that the demands that the Scottish Government has made—I suggest on behalf of the Scottish people—are still on the table and we still want those things. I am not satisfied that we do not have devolution of corporation tax an...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Fair enough. The other area that I wish to touch on is that of HMRC. It seems that it always wins, no matter what happens. Apparently, when it stops doing stamp duty there is a cost, and we pay for that. If it starts doing something else there is a cost, and we pay for that as...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Who writes the guidance at the moment? Is it HMRC generally?

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Is the answer to get better legislation so that there is not so much room for manoeuvre in the guidance? Or is the issue the way in which the institution—revenue Scotland or HMRC—operates?

John Mason SNP Committee

Scotland Act 2012

Okay, thank you. I have been a little bit nervous all along about the fact that HMRC could incur costs and then pass them on—largely to us. The report from Michael Moore’s side of the fence refers to the Scottish rate of income tax project and says:“The cost for the project ha...

John Mason SNP Committee

Landfill Tax (Scotland) Bill: Stage 1

Earlier, I asked representatives of revenue Scotland whether they saw it as part of their role to maximise the tax take. That might have been a little bit unfair, as that might be part of the tax management bill that we will consider in due course. However, grey areas will app...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Okay.Apparently, one of the agreements in all this is that all the costs, or the extra costs, of LBTT will be taken from the Scottish side, even though decisions are made at the United Kingdom end. Obviously, we hope to minimise costs. How do you see ROS’s role in that? I perc...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Okay. I think that there is provision that HMRC or the UK Government will be able to get information from you and/or revenue Scotland on an on-going basis. I understand that that is because they need to do statistics and all that sort of stuff. Do you anticipate any extra cost...

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

Will HMRC refund us for that?

John Mason SNP Committee

Land and Buildings Transaction Tax (Scotland) Bill: Stage 1

It appears, therefore, that we will pay for our own costs and for part of HMRC’s costs as well. You do not need to answer that. Laughter.

John Mason (Glasgow Shettleston) (SNP) SNP Committee

Scotland Act 2012

Up until now, the Parliament and even this committee have been quite relaxed about how much tax comes in because we only spend it and do not collect it. However, now our thinking will change. I want to ask about how HMRC is maximising the tax take. For example, we have mention...

John Mason SNP Committee

Scotland Act 2012

I am thinking of a situation in which a major employer in Scotland is struggling—we have had a few of them in recent years—and the Scottish Government is trying to help them while HMRC is looking to extract maximum tax, which we would completely support. Would that approach be...

John Mason SNP Committee

Scotland Act 2012

Yes—we shall see. I am sure that the Finance Committee will consider that. If revenue Scotland is cheaper on land and buildings transaction tax, the question that that raises in my mind is: how can we be convinced that we are getting the best deal from HMRC on the Scottish rat...

John Mason SNP Committee

Land and Buildings Transaction Tax (Implementation)

One of the points that I want to raise is about the timeline that you gave us. One of the headings under “Transition Arrangements” is “Agreement with HMRC”. If I am reading the timeline correctly, that started at some point in July and will continue until January or February, ...

John Mason SNP Committee

Land and Buildings Transaction Tax (Implementation)

The “Agreement with HMRC” was targeted to be reached by February. The timeline is divided into quarters, so it looks to me as if February is the target date.

John Mason SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

One of the criticisms of HMRC is that it seems to have had quite a lot of latitude to make concessions to taxpayers, especially—some people would argue—larger taxpayers. It pursues small taxpayers thoroughly, but sometimes it does a deal. Our adviser referred to some of that h...

John Mason SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

When they are giving different advice.I think that the bill team said that it was considering the matter.If someone comes along with their affairs in a bit of a mess—perhaps they have just not done their tax return in a while—and they are going to be open with their adviser ab...

John Mason SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

Yes—that is right. I assume that, if the HMRC estimate for the base work was higher than that of revenue Scotland, its charges for any extra work are likely to have been higher as well.

John Mason SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

So, if we had used HMRC, the costs would probably have been at least the same or potentially even higher.

John Mason SNP Committee

Revenue Scotland and Tax Powers Bill: Stage 1

I understand the point. I do not know whether it lies within the bill’s remit, but I will take advice on that.Paragraph 11 of your submission says:“It would be sensible for RS to adopt the position that tax and administrative burdens should be no more onerous than those in the...

John Mason SNP Committee

Economic and Fiscal Outlook (United Kingdom)

You have stated: “in the final week before the Budget, HMRC officials provided us with a final set of Scottish forecasts ... Due to the confidentiality of the measures we were unable to involve the Scottish Government in this stage of the process.” Can you explain why that w...

John Mason SNP Committee

Scotland Act 2012

So, if I understand that correctly, from HMRC’s perspective it would not really matter whether people were told weekly, monthly or annually. It would be the employers that would have a problem, because they would have to change their system.

John Mason SNP Committee

Scotland Act 2012

Thank you. On land and buildings transaction tax, the report mentions that the Scottish Government “will continue to supply HMRC with land transaction data”. Will you expand on why that needs to happen?

John Mason SNP Committee

Devolved Taxes Implementation

I accept that. As far as you are concerned, you and HMRC quoted on the same basis—as far as we are all aware.

John Mason SNP Committee

Devolved Taxes Implementation

Are you saying that it is not that you did not quote correctly, but that as things have been developed, extra costs have come in and, as far as we know, they would probably have come in on the HMRC side, too?

John Mason SNP Committee

Devolved Taxes Implementation

I accept that and obviously HMRC accepts that, because it clearly identifies the issue—not just on this tax, but on all taxes—and tries to eat into it. Did you want to say something, Mr Kenny?

John Mason SNP Chamber

Revenue Scotland and Tax Powers Bill: Stage 1

I appreciate the member referring to me, but he slightly overstates my enthusiasm for HMRC. Does he accept that there is still a key difference between anti-abuse legislation at Westminster and our wider anti-avoidance legislation?

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Committee

Scotland Bill Committee 27 September 2011

27 Sep 2011 · S4 · Scotland Bill Committee

Item of business

Scotland Bill

Corporation Tax

Mason, John SNP Glasgow Shettleston Watch on SPTV

Mr Clark mentioned HMRC, and Mr Thomson then said that it was “a guddle”. That is concerning because, from what we understand, we will be dependent on HMRC in relation to income tax, corporation tax and all sorts of revenues. We understand that the Office for Budget Responsibility has more of a relationship with HMRC than it does with the Treasury, even. How robust is HMRC?

In the same item of business

The Convener (Linda Fabiani) SNP

Good morning and welcome to the sixth meeting this year of the new Scotland Bill Committee. All those present should turn off their mobile phones and BlackBe...

Willie Rennie (Mid Scotland and Fife) (LD) LD

Don’t rush. Laughter.

The Convener SNP

Our first panel of witnesses—Ben Thomson of Reform Scotland; Garry Clark of Scottish Chambers of Commerce; and Martin Togneri of Scottish Development Interna...

Ben Thomson (Reform Scotland)

Certainly. I hope that committee members have received a paper that we published last week called “Devolution plus: Reform Scotland’s evidence to the Scottis...

Garry Clark (Scottish Chambers of Commerce)

Over the course of most of this year, but particularly over the summer, Scottish Chambers of Commerce has been consulting its members on corporation tax. We ...

The Convener SNP

Before Mr Togneri makes his opening remarks, I should point out that he is formerly of Scottish Development International. I am sorry about that, Mr Togneri.

Martin Togneri

You saved me pointing that out myself, convener. I do not represent the organisation any more, but I certainly used to work for it.I have been involved with ...

The Convener SNP

I ask committee members to indicate if they would like to ask a question and the panel to indicate if they wish to chip in on anything that is being discusse...

James Kelly (Rutherglen) (Lab) Lab

Thank you, convener. Good morning, panel, and thank you for coming in this morning. There is no doubt that the discussion around corporation tax has develope...

Garry Clark

From our members’ point of view, what is done with the tax is far more important than where the decision-making powers lie. Whether decisions are made in one...

Ben Thomson

I totally agree with Garry Clark that it is important to look at the details, but I do think that the question is in two parts, which I think is what James K...

Martin Togneri

I agree with most of Ben Thomson’s points. The devolution of the power must be treated differently from the expectation of what will happen once the power is...

James Kelly Lab

What is your view on the evidence that has been submitted to the committee to date and other evidence in the public arena on this area and is it adequate to ...

Martin Togneri

In my specific area of expertise, inward investment, the bulk of the evidence is very strongly in favour of devolving the power. Smaller economic systems hav...

Ben Thomson

The question divides into two: there is devolving the powers and there is the rate of corporation tax that is used. On devolving the powers, our argument has...

Garry Clark

Our members have diverse views on the benefits of devolving any tax. They take their own views, and we do not have a collective view on the principle. Howeve...

Richard Baker (North East Scotland) (Lab) Lab

Martin Togneri talked about the corporation tax rate in the Republic of Ireland. We have heard from others that corporation tax has been one of a number of a...

Martin Togneri

Scotland has been successful in attracting inward investment over many years. Without looking in detail at the figures for the years since I left SDI, I cann...

Richard Baker Lab

Nevertheless, many foreign companies choose to invest here, despite the level of corporation tax.There is one question on which I would like to touch with al...

Ben Thomson

I have just a quick one in answer to your first question. Everyone can produce evidence—the Holtham report, “Rebalancing the Northern Ireland economy” and th...

Martin Togneri

Corporation tax, when used as the only measure, probably is a blunt instrument, but it is an instrument. It is best deployed as one of a range of measures an...

Garry Clark

On volatility, over the past five years—albeit that, even in Scotland, we have been in a deep recession—corporation tax receipts have varied between £2.5 bil...

The Convener SNP

I ask for quick responses to Mr Baker’s next question, as we have a lot to get through.

Richard Baker Lab

I will be very quick, convener. The position has been taken that the question whether the power should be devolved is separate from the question of the rate ...

Martin Togneri

Although the threat of a race to the bottom is often raised in discussions about devolving corporation tax in a variety of regimes, academic evidence from Sw...

Garry Clark

Sometimes decisions are made irrespective of what the corporation tax rate is. For example, a business that has chosen to invest in the UK might continue to ...

Ben Thomson

Given that it represents only less than 5 per cent of the total tax take, we must not get carried away with the idea that corporation tax is the be-all and e...

Martin Togneri

My one caveat to Ben Thomson’s remarks is that transfer-pricing regulations limit the degree to which companies can use low-tax regimes for brass-plating. Mi...

Richard Baker Lab

We could debate that point for a long time.

The Convener SNP

Not just now, Mr Baker.