His assurance follows a report last December by Audit Scotland, which cast doubt on whether the new agency’s recruitment and IT programmes were sufficiently on track. It questioned whether the body would be ready in time to take up collection of the first national Scottish taxes to be levied for more than three centuries.
But Swinney’s announcement means that Revenue & Customs can now go ahead with arrangements to wind up stamp duty and landfill tax in Scotland from the end of March, ready for their replacement by new devolved taxes, which were introduced under the 2012 Scotland Act. The Act also empowers Revenue Scotland to collect a share of income tax from 2016, and it may gain further powers in the wake of the Smith Commission.
‘A group of senior Scottish and UK government officials have agreed that all necessary preparations are now in place and arrangements can now be made to introduce the devolved taxes,’ Swinney said today.
‘I have written to the Financial Secretary to the Treasury asking for the required orders to be laid at Westminster to allow Revenue Scotland to take the reins – effectively switching off stamp duty land tax and the UK landfill tax.
‘These two new taxes are the first national taxes for Scotland in 308 years and it is important that they are administered fairly and correctly.’
The new Land & Buildings Transaction Tax, which replaces stamp duty, remains controversial, despite revised rates announced by Swinney last week. Scottish Ministers wanted the tax to be markedly more progressive than its UK predecessor, but were caught unprepared when Chancellor George Osborne reformed stamp duty rates in the rest of the UK in last year’s Autumn Statement.
This exposed the new Scottish tax to complaints that it would disadvantage middle-market buyers in Scotland, leading to last week’s hurried revision of the rates, which Swinney said would now mean that half of all transactions were tax-free and that 40,000 buyers would benefit from lower duties.
But the upmarket estate agency Savills claimed this week that even the revised rates could still provoke a crash in Scotland’s property market, by penalising more expensive transactions and creating a knock-on effect on sales of less valuable properties. Tax will be higher in Scotland than in England on transactions above £330,000, with the disparity on a £1m sale approaching £35,000.
Swinney insisted today: ‘Our ultimate aim is to apply a fair tax regime to help grow the economy and increase opportunities for people. I am confident Revenue Scotland is up to that challenge.’
