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In March 2022, the Scottish Government published its business investment framework, outlining the principles for investments and decisions that it might make in the private sector. Mr Marks, can you bring us up to speed on whether the Scottish Government has used the framework in practice yet?

Good morning, Mr Marks. Will you reflect on Covid-19 support payments and the issue of fraud? In 2021-22, the Government allocated £5.3 billion in funding to Covid response activities. The estimate that we were working with for fraud and error equated to 1 to 2 per cent of that. Are you in a position to say to the committee how much has been recovered from fraud and how much has been recovered from payments made in error during that financial year?

Good morning, Mr Davies and Mr Boyle, and welcome. It is good to see you in the flesh, rather than on Zoom.

I want to delve a bit deeper into the monitoring and evaluation that you can do around the compliance of Scottish income tax payers, which is becoming a live issue, given the increasing divergence between the Scottish tax system and the UK tax system. Indeed, that is referred to in a report by the Institute for Fiscal Studies, which is covered in today’s Daily Telegraph.

I return to the issue that the deputy convener raised regarding postcodes and where people are resident. The NAO report says:

“HMRC has not identified any significant or widespread instances of taxpayers changing their address to obtain a tax advantage.”

However, today’s newspaper report points to David Alexander, the chief executive of Scotland’s largest letting agency DJ Alexander, saying that he is already seeing signs of high earners leaving. He said:

“It’s a natural situation that people think, ‘actually why would I reside here when I can move not that far and pay substantially less tax’.”

Given that HMRC says that it is not seeing any significant or widespread instances of that, can you elaborate on that? What would be significant or widespread, bearing in mind that Scotland has a very small number of upper-rate and high-rate taxpayers?

The divergence is around 2.1 per cent in relation to the rest of the UK, which is getting into what I perceive to be a significant sum. From your perspective, would it be reasonable to expect that there is an incentive for individuals faced with the prospect of higher tax to consider legitimate tax avoidance measures, such as converting income to dividends or moving south of the border? Is that a reasonable expectation that HMRC should be aware of?

Is it difficult to do that modelling in a predictive sense? Do you only realise that the flight has happened once you look back over the output for a year?

So, you are saying that if people are doing it, perfectly legitimately, over a number of years, HMRC would not necessarily be particularly activated about it.

You came forward with various recommendations in your report. Do you think that more third-party data checks and compliance activity should be undertaken in Scotland?

My concern is that, while the focus of Audit Scotland, the press and the public is on the organisation, there could be a process of quite effective window dressing. How long do you think that that quite intense process of scrutiny will last for? How long do you want to remain on the commission’s back, to make sure that it does not fall back into bad habits?

Good morning, Mr Boyle. Obviously, the report is optimistic and reflects a significant amount of work that has been done by the Crofting Commission. Looking forward, my concern is how that can be sustained. Paragraph 20 of your report says:

“The progress made by the Commission over the last year is welcome. The activity and actions taken will require time to bed-in and this must remain an area of focus for the Commission to ensure that the improvement is sustained. I will continue to monitor the Commission’s progress and consider further reporting in public as necessary.”

With regard to the use of the term “bed-in”, in practical terms, what do you still need to see happening before you have surety that there has been a turnaround rather than just a good plan that could subsequently be badly executed?

Thank you.