NAO report on Scottish rate of income tax

The National Audit Office (NAO) found that HMRC’s calculation for the Scottish rate of income tax revenue in 2016-17 was ‘fairly stated’. HMRC had calculated the final income tax revenue for the Scottish rate in 2016-17 as £4.347bn 5% lower than the original estimate of £4.566bn the NAO said in a report on administering the levy.

For 2017-18 HMRC estimates that Scottish income tax revenue will be £11.896bn. This reflects the more comprehensive powers granted by the Scotland Act 2016 which became effective from 2017-18. These allow Scotland to set its own rates and bands for non-saving non-dividend income and retain all income tax raised from Scotland rather than a proportion as previously.

HMRC has implemented several assurance processes to maintain the completeness and accuracy of the estimated 2.53 million Scottish taxpayers but the NAO said this remained a key challenge for the department.

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