Seòmar agus comataidhean

The purpose of amendment 18 is to make sure that situations that involve two different devolved taxes are in scope, which is a clarification of the intent of the legislation. It closes that loophole. We will discuss set-off in more detail in the next group, and I know that Liz Smith has lodged an amendment on that.

The important point is that there are safeguards for the taxpayer. The key concerns are on the ability to appeal and the review processes that provide that safeguard, which will maintain consistency with the legislation that is in place at the moment—including the important principle that tax remains due until such time as the review process has been completed.

I urge members to support amendment 18. The Revenue Scotland and Tax Powers Act 2014 provides that a taxpayer may make a claim for a repayment of tax, up to five years after the relevant tax return. Section 52 in this bill provides that a repayment of a claim can be refused in circumstances where a taxpayer has another amount of tax outstanding. That could relate to an undisputed amount of tax, an amount of tax due after a review or appeal or a failure to postpone payment in a review or appeal context. It adds to the existing list of circumstances set out in section 113 of the 2014 act.

Amendment 18 addresses a potential point of confusion that was raised during stage 1. It provides, as intended, that section 52 can be used when a taxpayer has a debit and a credit for the same devolved tax, as well as in situations that involve two different devolved taxes. I therefore urge members to support amendment 18.

Amendment 30, from Liz Smith, would have a much more fundamental impact on section 52. It would prevent Revenue Scotland from refusing a repayment claim in cases in which the taxpayer was disputing other outstanding debts through a review or appeal.

The Scottish Government’s position is that, in the case of a live appeal on another amount that is owed by the taxpayer, section 52, as amended by amendment 18, is consistent with broader provisions in the Revenue Scotland and Tax Powers Act 2014, and should not be amended in the way that is envisaged by amendment 30. Specifically, section 245 of the 2014 act provides for the important principle that

“Where there is a review or appeal ... any tax charged or penalty or interest imposed remains due and payable as if there had been no review or appeal.”

As amendment 30 would delay the timeframe during which section 52 could be used, it undermines that principle.

We will come to discuss set-off provisions in the next grouping but, for clarity, while there was a dispute, any repayment would not be automatically set off against tax that was due; the proposed arrangements would, however, preserve the status quo until the appeal was resolved. If the amount that is owed by the taxpayer is extinguished in an appeal, section 52 would cease to be relevant and the repayment claim would be considered against the other grounds in section 113 of the 2014 act. If the amount that is owed by the taxpayer is upheld on appeal, any set-off would be regulated by section 56. Revenue Scotland would provide guidance on the detail of that.

Overall, the Scottish Government’s view is that section 52, as amended by my amendment 18, would be more consistent with the existing legislation and would strike a better balance between the protection of the taxpayer and the protection of public revenues. For those reasons, I ask members not to support amendment 30.

I move amendment 18.

I have no further comment, convener.

Amendment 1 agreed to.

Amendments 2 to 4 moved—[Ivan McKee]—and agreed to.

Section 8, as amended, agreed to.

Sections 9 to 17 agreed to.

Section 18—Duty to register for tax

Amendment 5 moved—[Ivan McKee]—and agreed to.

Section 18, as amended, agreed to.

Sections 19 to 29 agreed to.

Section 30—Notification of cessation of eligibility for group treatment or of having place of business in UK

I have no further comments.

Amendment 8 agreed to.

Section 41, as amended, agreed to.

Section 42—Failure to notify production of exempt aggregate

Amendment 9 moved—[Ivan McKee]—and agreed to.

Section 42, as amended, agreed to.

After section 42

Amendment 10 moved—[Ivan McKee]—and agreed to.

Section 43—Inaccurate documents in tax credit claim

Amendment 11 moved—[Ivan McKee]—and agreed to.

Section 44—Failure to request approval of tax representative appointment

Amendment 12 moved—[Ivan McKee]—and agreed to.

Section 44, as amended, agreed to.

Section 45 agreed to.

After section 45

Amendment 13 moved—[Ivan McKee]—and agreed to.

Section 46 agreed to.

Section 47—General provisions for penalties relating to Scottish aggregates tax

Amendments 14 to 17 moved—[Ivan McKee]—and agreed to.

Section 47, as amended, agreed to.

Sections 48 to 51 agreed to.

Section 52—Refusal of repayment claim where other tax not paid

I thank Liz Smith for raising those important points and for welcoming amendments 19 and 20. Consultation is the crux of the issue, and the need for that is critically important. The lack of data has been recognised, including in the stage 1 debate and in committee. As more data becomes available, it will be important to use it to inform developments. It is important to have in place consultation provisions in the bill to allow that to happen effectively.

Amendment 19 agreed to.

Section 54, as amended, agreed to.

Section 55—Use of automation by Revenue Scotland

Amendment 20 moved—[Ivan McKee]—and agreed to.

Section 55, as amended, agreed to.

Section 56—Set-off by Revenue Scotland

I ask members to support my amendments in this group. The bill introduces the ability for Revenue Scotland to set off taxpayer credits against taxpayer debits. That administrative process is aimed at streamlining the payment of tax and reducing the number of unnecessary transactions that are required for both Revenue Scotland and taxpayers. That will support the efficient and effective administration of devolved taxes.

That power is particularly appropriate in a self-assessed tax system such as Scotland’s. The majority of the time, taxpayers will declare how much tax they owe to Revenue Scotland. There will, however, be occasions when either the taxpayer needs to amend the amount that they have declared or Revenue Scotland questions the declared or paid tax.

Revenue Scotland stated at committee that set-off would not be used where the amounts in issue are disputed. In such cases, taxpayers’ interests are safeguarded. I have introduced amendment 22 to clarify that set-off will not be used if the sum that is due by the taxpayer can be varied or set aside on review or appeal.

I hope that that offers reassurance to stakeholders and members who raised concerns about section 56 during stage 1.

As with section 52, I am conscious of the need to look at section 56 in the context of the Revenue Scotland and Tax Powers Act 2014. The act contains a number of different definitions and processes for the management of devolved taxes, and there is a danger of amendments having unintended consequences for other parts of that act. It is on that basis that I cannot support amendment 31 from Liz Smith.

Amendment 31 infers an equivalence between credits, which are sums that are payable by Revenue Scotland to a taxpayer, and debits, which are sums that are payable by a taxpayer to Revenue Scotland. Debits arise either by the taxpayer having self-assessed their liability or by a decision made by Revenue Scotland. Rights of review and appeal exist for the taxpayer in respect of the latter.

Credits may follow from reviews or appeals finding in favour of the taxpayer or by Revenue Scotland agreeing a repayment claim, or they may arise from an amendment of a tax return. However, existing provisions regulate credits in those situations and there is a risk that amendment 31 would create inadvertent change and legal uncertainty.

Making the requirement to pay credits subject to review or appeal could also operate to the detriment of a taxpayer if, for instance, the taxpayer was incurring interest charges on a debit.

If the goal is to protect the taxpayer, which is a laudable one, it is only the definition of “debit” in section 56 that needs to be adjusted. For those reasons I ask the committee not to support amendment 31 and instead support my amendment 22.

Lastly in this group, amendment 24 provides that the set-off provisions may not be used to set a post-insolvency credit against a pre-insolvency debit. That ensures that Revenue Scotland will not be unfairly advantaged in insolvency provisions and that the normal rules of insolvency will apply.

Amendments 21, 23 and 25 are minor and consequential to amendment 24.

I move amendment 21.

I urge members to support this group of amendments in my name. They make changes in response to the stage 1 scrutiny of the bill by the Delegated Powers and Law Reform Committee.

Section 4 defines “excepted processes”, the products of which are not considered to be aggregates for the purposes of Scottish aggregates tax. Included as an exempt process is any process by which a relevant substance is extracted or otherwise separated from aggregate. The bill sets out a list of relevant substances, which are generally industrial minerals not used for aggregate purposes. Section 4(4) provides Scottish ministers with a regulation-making power to allow them to add or remove a substance from the list. Amendments 26 and 29 make the use of that power subject to the affirmative procedure, as recommended by the Delegated Powers and Law Reform Committee.

Section 12 provides Scottish ministers with the power to set the rate or rates of Scottish aggregates tax by regulations. The bill as introduced specifies that use of the power should be subject to the made affirmative procedure. Amendments 27 and 28 make the first use of the power subject to the ordinary affirmative procedure, as recommended by the Delegated Powers and Law Reform Committee, while subsequent regulations will remain subject to the made affirmative procedure. That is consistent with the approach taken for Scottish landfill tax.

I move amendment 26.

Amendment 26 agreed to.

Amendments 27 to 29 moved—[Ivan McKee]—and agreed to.

Section 58, as amended, agreed to.

Sections 59 to 62 agreed to.

Long title agreed to.

I have covered all the points, thank you.

Amendment 18 agreed to.

Amendment 30 not moved.

Section 52, as amended, agreed to.

Section 53 agreed to.

Section 54—Communications from Revenue Scotland to taxpayers

That is something that Revenue Scotland highlighted, as I understand it. If there is a chain of supply with a number of parties in it, Revenue Scotland wants the ability to identify where it is most likely to recover the tax from. It might look at the situation and decide whether to target that particular link in the chain as the most effective way of doing so, rather than being compelled to address every link in the chain, which might not be the most effective use of resource to recover the tax that is due.

I urge members to support my amendments in the group. The bill enables groups of companies to register collectively for Scottish aggregates tax and sets out how groups of companies and members of such groups are to be treated with regard to tax liabilities and administrative processes.

Section 30 of the bill establishes that, where bodies corporate are treated as members of a group for the purposes of Scottish aggregates tax and one of them subsequently becomes no longer eligible for group treatment, that body is under a duty to notify Revenue Scotland of that fact.

Amendment 6 clarifies that that notification must be made immediately upon eligibility ceasing. That provides certainty about the timing of notification and avoids any dispute should a related penalty be issued by Revenue Scotland.

Amendment 7 inserts a requirement that a person or body that becomes aware of any inaccuracy in an application or notification regarding group treatment must notify Revenue Scotland immediately of that.

Amendment 13 creates a corresponding penalty of £250 for failing to do so. That matches the existing provision and penalty for the United Kingdom aggregates levy and is intended to encourage inaccuracies to be brought to the attention of Revenue Scotland.

I move amendment 6