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I recognise the complexity involved, and the issues that ultimately led to the call for evidence and the consultation on the draft order speak to that complexity. I received much correspondence from colleagues outlining their concerns about how ADS was operating. That is why we took forward this work, which seeks to address those concerns.

On the draft order specifically, Revenue Scotland will produce clear and comprehensive guidance ahead of 1 April, should Parliament agree to the order before us, which will be shared in advance. My understanding is that Revenue Scotland has already shared its work with relevant stakeholders in tax, accountancy and law, and that it intends to host a series of webinars in advance of 1 April to ensure that sufficient information, guidance and awareness are provided on how the system will operate, should the order be approved by Parliament.

The exemptions as set out in the amended schedule, should the order be agreed to, would be specific to local authorities under the 1987 and 1988 housing acts. Laura Parker might want to comment on the situation for other public bodies.

Good morning to you, convener, and to the committee.

The Land and Buildings Transaction Tax (Miscellaneous Amendments) (Scotland) Order 2024 provides for amendments to schedule 2A of the Land and Buildings Transaction Tax (Scotland) Act 2013 and introduces a new schedule 6A to the same act.

The amendments to schedule 2A relate to arrangements for the additional dwelling supplement. They address key stakeholder concerns about the existing legislation and ensure that the arrangements for the ADS work as intended.

New schedule 6A to the 2013 act provides extended relief from both residential LBTT and the ADS for local authorities purchasing property to meet local housing needs. It broadly aligns the treatment of local authorities with that of registered social landlords and will help to support our wider housing policies.

The Scottish Fiscal Commission considered the financial implications of the amendments in its December 2023 forecast, and the order was developed following a thorough consultation and review process, which included an initial call for evidence and views, followed by a consultation on draft legislation. The result of that process is a package of amendments that address key stakeholder concerns with the current legislation, ensuring that taxpayers are able to claim the reliefs and exemptions to which they are entitled and extending support where needed.

I welcome the contributions from a wide range of stakeholder groups in developing the content of the draft order, and I hope that the committee will support the motion to approve it this morning.

My understanding is that they would not be exempt, but I am happy to clarify that and write back to the committee. Our conversation has explored a wider range of issues around exemptions for public bodies. The question is whether, if local authorities are exempt, other public bodies should also be exempt.

We could start to go through every public body one by one, but I suggest that it would be helpful to the committee for us to take that away, to have further discussions, to engage with housing colleagues and the Minister for Housing, and to write back to the committee in order to provide a broader overview of the current landscape, provide clarity on the point that you raise and set out the work that we will be doing to develop policy in that area.

The previous conversation around the merits of a finance bill speaks to the fact that there will always be a need for care and maintenance. We have to take decisions based on the information that we have at the present time. Therefore, from that perspective, the answer is yes, but we recognise that, inevitably, other issues and concerns can emerge in the future and that we would respond to those, just as we have responded previously.

This particular tax has been the subject of quite a significant volume of legislation, both primary and secondary, and amendments since it was introduced. We will respond and will seek to do so in a way that is as open and transparent as possible through engagement. With regard to specific timelines around the issues that have been raised by the SPA, we will engage with the authority on that. As I said, I am more than happy to update the committee in due course on where those conversations lead.

My understanding is that HMRC’s discretion is really just to extend the timeline. I appreciate that it is 36 months in England, but one of the things that we are doing through the order is extending the period to 36 months.

The issue of whether Revenue Scotland should have such a discretionary power is one that we can explore, but it would represent a significant change from the way in which we operate at the moment, whereby Parliament legislates and Revenue Scotland provides the guidance. It would be a significant change for Revenue Scotland, recognising that HMRC operates under a different set-up. However, the broader point is one that we can consider. A lot more detailed consideration and exploration would be required.

I come back to the point about how we have sought to address the issues that have been raised, which have led to the order coming before the committee. Having identified, through consultation and engagement, a number of specific anomalies, we are seeking to address those directly by taking a targeted approach through the amendments for which the order provides.

I will make two points.

We have sought to address the circumstances that have given rise to the ask for an exceptional circumstances provision through some of the specific amendments that we make in the order. That should reduce the ask for an exceptional circumstances provision and is an important response to some of those specific circumstances.

We gave consideration to an exceptional circumstances discretionary power, but there is concern around administrative complexity and uncertainty, particularly for Revenue Scotland and taxpayers.

Through the order, we have sought to address some of the specific concerns that have been raised about the way in which ADS has operated previously. That is why we have not pursued an exceptional circumstances provision, but rather have sought a targeted approach to addressing some of the particular issues that have arisen previously.

I would not want to describe today’s consideration as the end of the matter. As with all aspects of tax legislation, it is a process rather than an event. A number of issues have been raised. It was always a case of finding a balance. I appreciate that there are competing demands and that not everyone can be satisfied without that impacting on others.

The broader points around transparency and how user friendly the presentation of legislation is—again, that touches on the point about an annual finance bill—are very important. We want to have a tax system that is as straightforward to use as possible. We understand the importance of that in relation to economic growth and providing certainty. In that spirit, we are very keen to continue those conversations, whether with public bodies and other authorities or, indeed, with organisations such as ICAS, CIOT and the Law Society.

I am more than happy to ask officials to engage directly with the committee following this meeting, and we can discuss how we can take forward that work.

I am not in a position to give timescales. We will consider any aspects pertaining to housing that are relevant to other public bodies. We will also consider the issue not only from the perspective of the tax—in this case, the LBTT—but more broadly through engagement with housing colleagues. As I said, I am more than happy for Government officials to engage directly with the Scottish Police Authority on the matter.