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It is just that, with the landfill tax, there has been no change or differential from the UK whatsoever, even in relation to inert waste, for example, where there is perhaps more room for manoeuvre.

I will move on, because I have a couple more questions and colleagues want to come in. You have said that you will take a more distinctive approach to compliance. What do you mean by that?

We talked about data earlier. One of the things that I was astonished by was that, despite the fact that we would think that the 32 local authorities would know exactly what is going on in their areas and would feed that information into the Scottish Government, there seems to be a bizarre lack of knowledge of just how many unregistered quarries there are in Scotland. They are producing who knows how much aggregate, on which the taxpayer is missing out on getting a return. Compliance is important. One of the positive benefits of devolution would be if there was a push to ensure that all those quarries are located and dealt with. Some people say, “Oh, you can just dig up a couple of hundred tonnes from a farmer’s backyard and fill in the land later.” However, from what we have been told, a lot of those sites are much bigger than that and are major quarries. It is bizarre that the UK Government does not seem to have done more work to implement a levy and trace those sites with HMRC. I hope that the Scottish Government and its agencies will do more about that.

What specifically do you plan to undertake in order to ensure that that situation—in which, arguably, people are effectively tax dodging—is addressed? What Mr Waite said about the supply chain is important, but what is going to be done to catch those who do not comply in the first place?

I think that we are conflating two things. One is whether Scotland’s aggregates tax, when it comes in, will incentivise the switch to recycled secondary products so that fewer natural products are used. The other issue, which you mentioned, is compliance. I think that everybody round this table wants those who are producing those aggregates but not currently paying taxes to pay those taxes. That is an absolute, and I think that everyone in the industry who is legitimate is doing that. I commend the fact that Revenue Scotland is determined to ensure that that happens.

I will switch back to that issue in a second, but I return to my initial question about a differential in taxation. We appreciate that recycled aggregates will be exempt from the tax, and that there are other issues, such as whether local authorities should be paying the tax. However, the idea behind the landfill tax was to encourage a change in behaviour. That has happened on a UK basis, but that tax has never varied between Scotland and England. The bill’s policy memorandum says that the approach is to ensure

“that the devolved tax can evolve over time to support Scottish Government circular economy objectives.”

It goes on to say that the objectives are to encourage the minimum necessary exploitation of primary aggregates, maximise the use of secondary and recycled aggregates, and incentivise innovation and development of alternative materials.

The tax on aggregates has been £2 a tonne since 2009, regardless of inflation and all the rest of it, and it is going up to a thumping £2.03 next month. Is that actually happening? How will £2 a tonne across the board in Scotland—the same as in England—possibly have any impact on behaviours?

Good morning, and welcome to the 10th meeting in 2024 of the Finance and Public Administration Committee. The only item on our agenda is to take evidence from two panels of witnesses on the Aggregates Tax and Devolved Taxes Administration (Scotland) Bill.

First, we will hear from Eric Brown, a member of the Chartered Institute of Taxation’s Scottish technical committee; Justine Riccomini, the head of tax for employment and devolved taxes at the Institute of Chartered Accountants of Scotland; and Isobel d’Inverno, the convener of the Law Society of Scotland’s tax law sub-committee. I welcome you all to the meeting. Thank you for your written submissions.

We will move straight to questions. About 150 current United Kingdom taxpayers have been identified as being likely to be required to register for the Scottish aggregates tax. Is that a fair reflection of the actual number of taxpayers, or have a number of them not been picked up yet. Is anyone able to answer that question?

To be fair, I should have asked Isobel d’Inverno to answer the question, because it is her submission that mentions the figure.

Okay. I will move on. The potential of cross-border issues as a result of differential taxation has been raised as a concern. When we went on a visit a couple of weeks ago, we were told that there are not many cross-border issues, because the tax is about £2 per tonne and it costs a lot more than that to pay the wages of a driver, to put petrol in the truck and to ship the material hundreds of miles, so the £2 does not have much of an impact.

The Chartered Institute of Taxation’s submission states:

“Scotland exports far more aggregate to rUK than it imports (over 5.5million tonnes compared to 16,000 tonnes)”.

That is obviously a colossal differential. I take it that those aggregates cannot be sourced from elsewhere in the UK. You say that the way in which the bill is structured and the relations between the UK and Scottish Governments mean that Scotland could lose between £8 million and £10 million a year in revenue. Could you expand on that?

Justine, one of the issues that concern you is the potential impact on other taxes, such as land and buildings transactions tax. Is that right?

You said in your submission that it is “disproportionate”. Further on, you touched on safeguards and said:

“there do not appear to be any safeguards for taxpayers to deal with situations where the taxpayer may not agree that they have failed to pay an amount of tax, because they do not believe the tax is payable.”

What safeguards should be introduced in the bill?

That is a real issue. If the tax is levied after something has been sent to England, the UK Government gets the tax rather than the Scottish Government.

Of course.