Finance Secretary’s first update shows devolved taxes up £74 million on estimates.
The first set of annual receipts for Scotland’s Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) show returns have exceeded projections.
In his first statement to Parliament as Finance Secretary – following his first appearance before the Finance Committee this morning – Derek Mackay has told MSPs that a total of £572 million was collected in 2015-16, up around £74 million on initial forecasts.
The figures were included in today’s Scottish Government Provisional Outturn 2015-16, which shows effective management of the government’s £29 billion budget – deploying resources as needed in 2015-16 and carrying forward 0.5% as extra spending for 2016-17.
Mr Mackay also updated Parliament on his contact with the UK Chancellor and committed the Scottish Government to continuing its approach of “stability, certainty and proactivity”.
The Finance Secretary said:
“This is the first set of provisional outturn figures that take account of the powers devolved to the Scottish Parliament under the 2012 Scotland Act and they are very positive.
“We introduced the Land and Buildings Transaction Tax last year with the particular aim of helping first-time buyers enter the property market. Almost 9,700 additional house purchases were taken out of tax altogether in 2015-16 and more than 41,600 buyers paid less than they would have under UK stamp duty.
“Today’s figures show we not only supported first-time buyers, we also generated around £74 million more in revenues from the two devolved taxes than we originally expected.
“The provisional outturn figures show the Scottish Government has managed its budget of around £29 billion tightly and effectively, deploying resources where needed in 2015-16 and carrying forward a prudent 0.5% to spend this year, reflecting the need to work across financial years within the budgeting limits that apply.
“In light of current events, it is even more important now the Scottish Government continues our competent handling of the economy with our approach of stability, certainty and proactivity.”
Mr Mackay this morning also made his first appearance as Finance Secretary at Parliament’s Finance Committee, where he pledged continued close co-operation with members.
Mr Mackay said:
“No-one can deny the significance of last week’s events for our economy, our communities or indeed our constitution. This morning I spoke with the UK Chancellor and we have agreed to keep in contact in the coming weeks.
“At this point, with a forthcoming change of Prime Minister and likely impact of Brexit on UK Government finances, it is not clear what a future UK Government’s fiscal plan will be. It is therefore important we have the appropriate time to consider and be ready to respond to any possible financial impact on Scotland.
“We will work with the Finance Committee to ensure the Scottish Parliament has both the time and reliable data it needs to scrutinise our plans. That will see us bring forward a Budget for 2017-18 in the first instance with a full spending review undertaken once we have greater clarity around the likely fiscal future of the UK.
“Scotland is a vibrant, inclusive country with a strong economy. It will remain an attractive place in which to invest and do business. The Scottish Government will continue to do all it can to provide stability in our economy and public finances, supporting our businesses, public services and the communities we serve.
“I was grateful to have the opportunity to discuss this with the Finance Committee this morning and look forward to continuing to work closely with them in the months to come.
“It is now critical that the Scottish Government continues to manage our public finances competently and we continue to be committed to that aim.”
Total devolved tax revenues exceeded initial forecasts by around £74 million, comprising £44 million from Land and Buildings Transaction Tax and £30 million from Scottish Landfill Tax. Almost 9,700 additional house purchases were taken out of tax altogether in 2015-16 compared to the UK tax, as the Scottish Government increased the threshold for paying tax, and more than 41,600 buyers paid less than they would have under UK stamp duty.
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