Press release: New tax framework can limit need for last minute changes

The “eleventh-hour” agreement between the Scottish Government and Green Party to secure the Scottish Budget would have been too rushed to conform with its proposed framework for introducing new taxes, the Chartered Institute of Taxation has said.

The Scottish Government is proposing an 18-month window for identifying and developing new tax policies, a move supported by the CIOT and the Association of Taxation Technicians (ATT).

In its response to the Scottish Government consultation Devolved Taxes: A policy framework1, the CIOT said that plans to introduce a tourist tax and workplace parking levy would have been too significant a change in too short a timescale to go along with the government’s planned timescale for implementing new taxes.

It said last minute agreements could restrict parliamentary scrutiny and limit the time available to reach agreement2. The CIOT also recommended that the government consider extending the process to give politicians and stakeholders the chance to study possible new taxes before they are considered as part of a legislative programme3.

This process could help ensure that minority governments are able to reach agreement with other parties on tax changes while also preventing unexpected changes from being railroaded through by any future majority government.

The CIOT and ATT also reiterated their support for the introduction of a Scottish Finance Bill as a means of establishing a regular legislative mechanism for making changes to tax policy.

Alexander Garden, chair of the CIOT Scottish Technical Committee, said:

“The political make-up of the current Scottish Parliament makes it inevitable that parties need to find consensus, but it is also important that there is a structured process in place to develop new tax policy and legislation.

“To lessen the need for last minute agreements that can lack proper parliamentary scrutiny, the government should consider consulting at an even earlier stage, giving stakeholders the chance to examine new ideas before there is a cast-iron commitment to introducing new legislation.   

“Following such a process will also bring benefits in cases where there is a parliamentary majority, as it will ensure proper consultation and scrutiny and help to prevent unexpected changes from being railroaded through.

“This can help to deliver a tax regime that is fair, simple and certain and that avoids unintended consequences for all stakeholders, including taxpayers and government”.

On proposals for a Scottish Finance Bill, Senga Prior, ATT’s Scottish spokesperson, said:

“The introduction of an annual Finance Bill would go some way towards improving the scrutiny, visibility and accountability of tax decisions made by Holyrood.

“At this stage, when there are only two fully devolved taxes, a Scottish Finance Bill would not necessarily have to be a substantial document. But it does help to establish a structure and a regular cycle for making changes to tax legislation, something that will become necessary if and when further taxes are devolved”.


Notes to editors

  1. A copy of the CIOT’s response to the consultation, Devolved Taxes: A policy framework, can be found here. A copy of ATT’s submission can be also be read by clicking on this link.
  2. The Budget (Scotland) (No. 3) Bill was passed on 29 March 2019 (date of Royal Assent); the amendment to the Transport (Scotland) Bill was proposed and the public survey launched on 9 May 2019, 11 weeks after the Budget Bill became law. The public survey closed on 20 May 2019, providing just 11 days for public consultation.
  3. The Better Budgets report, published in 2017 by the CIOT, Institute for Government and Institute for Fiscal Studies, recommended that in the UK, “Chancellors should make an early statement in a new Parliament to spell out their priorities for, and approach to, the tax system (while retaining some flexibility to respond to events). This should deter them from falling into ad hoc approaches”.
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