Publication - Consultation paper

Devolved taxes: policy framework consultation

Published: 14 Mar 2019
Financial Strategy Directorate
Part of:
Economy, Money and tax, Scottish Budget

Consultation on a new approach to the planning, management and implementation of the fully devolved taxes in Scotland.

27 page PDF

709.0 kB

27 page PDF

709.0 kB

Devolved taxes: policy framework consultation
4. Legislative and policy cycle

27 page PDF

709.0 kB

4. Legislative and policy cycle

4.1 Phase 1: Inform and engage

Scotland benefits from an informed and knowledgeable civic society. More and better engagement means better outcomes for people, families and communities; a more robust, inclusive and sustainable economy; and leads to a greater trust and understanding of government.

The Scottish Government is committed to a more strategic approach to engagement around the fully devolved taxes, building on its reputation for good and effective communications with stakeholders.  The long-term objective is to use wider-ranging engagement with a broad range of stakeholders to lead and inform the public understanding of tax in Scotland, ensuring that taxpayers understand the landscape in which they pay their taxes and the vital role they play in funding public services in Scotland.  

This phase of the cycle will establish identifiable points throughout the year when the Scottish Government will undertake specific engagements on the fully devolved taxes.  In turn, it will create opportunities for stakeholders to make representations to the Scottish Government, providing clarity on when representations should be made so that there is appropriate time for them to be considered and assessed.

This phase also allows the Scottish Government to begin to communicate and inform its broad priorities for the fully devolved taxes over the coming year(s).

Devolved Tax Collaborative

In 2013, the Scottish Government established the Devolved Tax Collaborative (“DTC”) as a means of bringing together the tax advisory community and others with an interest in tax.  These events continued for around two years and were warmly welcomed by stakeholders.

Since the implementation of the devolved taxes in April 2015, the DTC has been replaced by Revenue Scotland’s LBTT & SLfT Fora. Revenue Scotland have used these events to provide updates on their performance, the performance of the taxes, and to discuss technical and practical issues. For its part, the Scottish Government also conducts ongoing engagement with stakeholders, including ministerial engagement in advance of annual Budgets.

The move from the DTC to tax specific forums means there has been less opportunity for wider discussion on tax policy issues.  The Scottish Government will therefore propose to reconvene annual meetings of the Devolved Tax Collaborative (“DTC”).

These events will allow the Scottish Government to set out future tax policy priorities and provide updates on emerging tax proposals.  It will also allow the Scottish Government to listen to feedback from a broad range of businesses, interest groups and individuals before progressing these proposals.  Attendees will be encouraged to contribute to discussions on the effectiveness of the tax system, as well as to comment and make proposals on emerging policy priorities.

Question 1:  Do you welcome the use of the DTC as an annual tax forum and agree with its stated purpose? 

Question 2:  Do you have any other preferences as to how the Scottish Government should carry out engagement on the fully devolved taxes?

4.2 Phase 2: Consultation and developing policy

The second phase of the cycle brings together the policy development, legislative design and drafting.  It is characterised by continuous engagement with individuals, businesses, practitioners and professional bodies.  This collaborative approach will ensure that policies and legislation are fit for purpose and their likely impacts are understood.

Tax consultations

The Scottish Government has taken a collaborative and open approach to tax policy development in order to ensure tax policy is informed by a diverse range of views and to help taxpayers and the wider public to better understand why changes are being made.  For example in 2017, the Scottish Government published a discussion paper on the future of income tax, followed by a number of roundtable events in advance of the Scottish Budget, which was warmly welcomed by stakeholders[9].

With this in mind, open and extensive consultation and engagement throughout the policy and legislative cycle is a cornerstone of the Devolved Taxes Policy Framework. 

The Scottish Government will publish a tax consultation on an annual or biennial basis (depending on the frequency of the cycle – see question at the end of section 4.5).  Where possible, the consultation will seek views on a range of issues under consideration, rather than consulting on each on an individual basis. It will set out:

  • the range of tax measures the Scottish Government are exploring;
  • the policy objectives of those measures;
  • on what areas views are sought; and
  • an assessment of the likely impacts.

Different types of consultation and engagement will work better for different types of changes.  In some instances, for example, in wider-reform of the tax system, the Scottish Government will hold events to encourage participation in the consultation and to provide further information.  In other instances, it may be appropriate to consult informally with subject-matter experts or professional bodies, particularly if the changes are minor or technical in nature.

The Scottish Government will also, where possible, consult on draft legislation.  If it is not possible to do so at the time of the tax consultation, there may be a second, shorter period of consultation specifically on the draft legislation.

Question 3:  Do you support the Scottish Government’s proposed approach to tax consultations, in particular consulting on issues collectively rather than on an individual basis?


The Consultation Hub[10] contains information on all open Scottish Government consultations.  It explains how responses can be submitted (usually online or in writing), when responses must be made by (the Scottish Government aims to consult for a minimum of 12 weeks), and provides the name and contact details of the official leading on the consultation.

The Consultation Hub also lists consultations which have closed, providing information on the types of respondent, a summary of the responses and any actions taken as a result.  If the respondent has provided their consent, their response to the consultation will also be published.

Assessing and evaluating policy

The Scottish Government understands the impact that changes to taxation can have on individuals, public services and the economy and will always take decisions in a careful, considered and responsible way.  Any changes to a fully devolved tax will be carefully assessed to ensure that they are informed and evidence based.

In assessing tax policies, the Scottish Government will ensure that proposals are consistent with the Scottish Approach to Taxation.  In addition, the Scottish Government will explore changes and initiatives that best support Scottish Government’s wider economic, social and environmental policy objectives.

In certain instances, there will be conflict between the objectives, including the four maxims which underpin the Scottish Approach to Taxation, and this may present challenges in meeting each of them to the same extent.  Where this happens, the Scottish Government will balance the objectives, along with any other relevant considerations, to achieve the best possible policy and legislation.

4.3 Phase 3: Parliamentary process 

All fully devolved tax legislation will be subject to scrutiny from the Finance and Constitution Committee and the Scottish Parliament.  Ministers and the Finance and Constitution Committee have asked the Scottish Government and Scottish Parliament to establish a Working Group to explore options for an alternative legislative process for devolved taxes legislation, including whether there is the need for a Finance Bill.  This builds on the recommendations made by the Budget Process Review Group in its report on 30 June 2017[11].

The membership of the Working Group will be extended to representatives from Revenue Scotland, the Scottish Fiscal Commission and the Office of Tax Simplification.  The Law Society of Scotland, the Institute of Chartered Accountants of Scotland, the Chartered Institute of Taxation and the Chartered Institute for Public Finance and Accountancy will also be involved in the Working Group.

The Working Group will report to the Cabinet Secretary for Finance, Economy and Fair Work and the Finance and Constitution Committee later in the year to set out its views on the merits of the differing options.  Once agreed, the Cabinet Secretary for Finance, Economy and Fair Work and the Finance and Constitution Committee will then present these recommendations to the Scottish Parliament seeking approval for the proposals alongside the Scottish Budget 2020-21 later this year. 

4.4 Phase 4:  Post-implementation

It is important that policies are reviewed after they have been implemented and properly embedded, and the final part of the policy and legislative cycle is a commitment to undertaking more systematic reviews of tax changes.

There will always be challenges in establishing the parameters for reviewing the impact of policies and legislation so it will be important to identify from the outset the baseline data that is needed to do so.

The post-implementation review will seek to evaluate:

  • if the policy is operating as intended;
  • if the resultant revenues and/or the benefits to wider-policy objectives were as expected; and
  • whether the consequences were anticipated.

In undertaking such reviews, the Scottish Government will also ensure that the changes remain consistent with the existing legislative provisions, and more generally that the devolved taxes are kept up-to-date with wider legislative reform.

4.5 Indicative timeline of cycle

Phase 1 (May – December)

Devolved Tax Collaborative (May – June)
The annual tax forum will bring together representative bodies, networks, individuals and organisations with an interest in the tax system.

Research, analysis and evaluation (June – November)
The Scottish Government will research and analyse any tax changes, before evaluating their effectiveness.

Budget announcement on tax priorities (December)
The Cabinet Secretary for Finance, Economy and Fair Work will announce the tax measures the Scottish Government will look to develop in the year ahead as part of the Budget.

Phase 2 (January – December)

Consultation (January)
Following the Budget announcement on tax priorities, a consultation will be launched on the proposed measures.

Policy and legislative development (May – November)
At this stage, the Scottish Government will more fully develop policy and legislation. During this time it may be appropriate to carry out further consultation on draft legislation.

Announcement on new legislation (December)
An announcement will be made when the legislation has been drafted and Ministers are content to proceed.

Phase 3 (January – April)

Parliamentary process (January – March)
The draft legislation will be subject to scrutiny from the Finance and Constitution Committee and the Scottish Parliament.

Legislation takes effect (April)
Subject to approval by Parliament and Royal Assent, the legislation will take effect on 1 April.

Phase 4

Post-implementation review
A review of the policy, including how it was developed and implemented, as well as whether it is achieving its aims, will be conducted.


Question 4:  What are your views on the proposed policy and legislative cycle?

Question 5:  What are your views on how frequent the cycle should occur - annually or every two years?