Publication - Statistics

Government Expenditure and Revenue Scotland 2010-2011

Published: 7 Mar 2012
ISBN:
9781780457055

Government Expenditure and Revenue Scotland (GERS) is a National Statistics publication. It estimates the contribution of revenue raised in Scotland toward the goods and services provided for the benefit of Scotland. The estimates in this publication are consistent with the UK Public Sector Finance Statistics published in January 2012.

Government Expenditure and Revenue Scotland 2010-2011
3 PUBLIC SECTOR REVENUE

3 PUBLIC SECTOR REVENUE

Introduction

This chapter provides detailed estimates of Scottish public sector revenue. As Chapter 4 discusses the treatment of North Sea revenue in detail, the focus of this chapter is on non-North Sea elements of public sector revenue.

The majority of public sector revenue payable by Scottish residents and enterprises is collected at the UK level. Generally it is not possible to identify separately the proportion of that revenue receivable from Scotland. GERS therefore uses a number of different methodologies to apportion revenue to Scotland. These methods are discussed in Annex B and in the detailed revenue methodology paper on the GERS website11.

GERS makes use of the best data sources and methodologies available and therefore represents as accurate a reflection of public sector revenue in Scotland as is currently possible. In some cases, a variety of methodologies could be applied, each leading to different estimates of public sector revenue in Scotland.

Estimated Revenue 2010-11

Table 3.1 highlights estimated public sector revenue in Scotland and the outturn data for the UK in 2010-11. The contribution of each element of taxation to the total estimated tax yield in Scotland, and the proportion of UK revenue raised in Scotland, are also included in the table.

On the basis of the assumptions and methodologies described in this report, in 2010-11, total public sector non-North Sea current revenue in Scotland was £45.2 billion. This is equivalent to 8.3 per cent of UK total non-North Sea current revenue which is broadly in line with Scotland's share of the UK population12.

Table 3.1: Current Revenue: Scotland 2010-11

Scotland UK Scotland as % of UK
£ million % of total non-North Sea revenue £ million
Income tax 10,634 23.5% 146,628 7.3%
Corporation tax (excl North Sea) 3,114 6.9% 34,661 9.0%
Capital gains tax 244 0.5% 3,589 6.8%
Other taxes on income and wealth 362 0.8% 6,177 5.9%
National insurance contributions 8,018 17.7% 97,755 8.2%
VAT 8,560 18.9% 97,277 8.8%
Fuel duties 2,339 5.2% 27,256 8.6%
Stamp duties 595 1.3% 8,931 6.7%
Tobacco duties 985 2.2% 9,131 10.8%
Alcohol duties 895 2.0% 9,434 9.5%
Betting and gaming and duties 113 0.3% 1,069 10.6%
Air passenger duty 183 0.4% 2,183 8.4%
Insurance premium tax 210 0.5% 2,511 8.4%
Landfill tax 99 0.2% 1,094 9.0%
Climate change levy 61 0.1% 660 9.2%
Aggregates levy 54 0.1% 292 18.5%
Inheritance tax 159 0.4% 2,722 5.8%
Vehicle excise duty 470 1.0% 5,789 8.1%
Non-domestic rates1 1,891 4.2% 22,682 8.3%
Council tax 1,986 4.4% 25,730 7.7%
Other taxes, royalties and adjustments2 694 1.5% 8,073 8.6%
Interest and dividends 183 0.4% 2,151 8.5%
Gross operating surplus 2,934 6.5% 25,371 11.6%
Rent and other current transfers 395 0.9% 1,711 23.1%
Total current revenue (excluding North Sea revenue) 45,177 100.0% 542,877 8.3%
North Sea revenue3      
Per capita share 736 8,786 8.4%
Geographical share 7,951 8,786 90.5%
Total current revenue (including North Sea revenue)      
Per capita share 45,914 551,663 8.3%
Geographical share 53,128 551,663 9.6%

1. Excludes non-domestic rates that local authorities pay themselves.
2. Although this group includes some 11 separate revenues (as set out in the detailed methodology paper on the GERS website), the two largest - TV Licences and National Lottery Distribution Fund - account for 65 per cent (£448 million) of this estimate for Scotland. This group also contains a small accounting adjustment to align the revenue estimates to those in the January 2012 UK Public Sector Finances Statistical Bulletin. This adjustment is apportioned to Scotland on the basis of Scotland's share of total onshore UK tax revenue.
3. A full discussion of North Sea revenue is provided in Chapter 4.

Income tax was the single largest source of public sector revenue in Scotland. In 2010-11, income tax revenue was estimated at £10.6 billion - approximately a quarter of all public sector revenue in Scotland (excluding revenues from the North Sea).

VAT represented the second largest revenue source in Scotland, and was the largest source of revenue from indirect taxes, raising an estimated £8.6 billion in 2010-11 - 18.9 per cent of total non-North Sea revenues. National insurance contributions represented the third largest source of revenue, accounting for 17.7 percent of total non-North Sea revenues.

Corporation tax (excluding that from the North Sea) represented the fourth largest revenue source in Scotland in 2010-11 with receipts of £3.1 billion. This was equivalent to 6.9 per cent of total non-North Sea current revenue13.

Gross operating surplus (GOS) refers to the operating (or trading) surpluses (or losses) of central government, local government and public corporation trading activity. It was the fifth largest revenue source in Scotland during 2010-11, generating £2.9 billion in revenue, 6.5 per cent of total non-North Sea revenue in Scotland.

Scotland accounted for 11.6 per cent of the total UK GOS in 2010-11. Scotland's relatively large share of the UK GOS is partly due to Scottish Water which is one of the greatest contributors to UK public corporations' GOS. The equivalent water companies in England and Wales are outside the public sector and hence do not contribute to their GOS14.

After these five main categories, all other types of tax listed each individually accounted for less than 5 per cent of total non-North Sea revenue in Scotland in 2010-11, with the exception of fuel duty, which raised £2.3 billion or 5.2 per cent. Together, council tax and non-domestic rates raised £3.9 billion (8.6 per cent of total non-North Sea revenue).

The Scottish share of total UK revenue for each element of revenue varies according to the particular tax being estimated. For income tax, Scotland's share of UK revenue was lower than its share of the UK population. For national insurance contributions, Scotland's share of UK revenues was broadly in line with its per capita share. For VAT and corporation tax (excluding North Sea), Scotland's share of UK revenue was slightly higher than its share of the UK population. Revenue from duties on betting and gaming, alcohol and tobacco were also higher than Scotland's share of the UK population.

Table 3.2 shows estimates of Scotland's share of UK revenue for five key taxes between 2006-07 and 2010-11. In each year during this period, total non-North Sea revenue in Scotland has accounted for 8.3 per cent of UK non-North Sea revenue, broadly in line with Scotland's share of the UK population.

Table 3.2: Non-North Sea Current Revenue: Scotland/UK Share 2006-07 to 2010-11

(per cent of UK revenue)
2006-07 2007-08 2008-09 2009-10 2010-11
Income tax 7.4% 7.4% 7.4% 7.2% 7.3%
Corporation tax (excluding North Sea revenue) 8.7% 8.7% 8.7% 8.9% 9.0%
National Insurance contributions 8.0% 8.2% 8.3% 8.1% 8.2%
Value added tax 8.7% 8.8% 8.7% 8.7% 8.8%
Local authority revenue1 8.5% 8.3% 7.9% 7.9% 8.0%
All other revenue 9.1% 9.2% 9.4% 9.4% 9.3%
Total non-North Sea current revenue 8.3% 8.3% 8.3% 8.3% 8.3%

1. Council tax and non-domestic rates

Box 3.1 - Stamp Duty

Stamp duty is levied on two types of transactions - i) conveyances and transfers of land and property (stamp duty land tax) and ii) share and marketable security transactions (stamp duty reserve tax). The revenue raised from both sources is reported jointly as a consolidated estimate in Table 3.1. The tables below provide further information on the revenue raised by each element.

Stamp Duty Reserve Tax: 2006-07 to 2010-11

(£ million)
2006-07 2007-08 2008-09 2009-10 2010-11
Scotland 286 339 274 266 265
UK 3,756 4,165 3,204 3,016 2,970
Scotland as % of the UK 7.6% 8.1% 8.6% 8.8% 8.9%

Stamp Duty Land Tax: 2006-07 to 2010-11

(£ million)
2006-07 2007-08 2008-09 2009-10 2010-11
Scotland 423 554 321 249 330
UK 9,634 9,956 4,797 4,885 5,961
Scotland as % of the UK 4.4% 5.6% 6.7% 5.1% 5.5%

Estimated Revenue: Scotland and the UK, 2006-07 to 2010-11

Table 3.3 shows estimated current revenue in Scotland and the UK between 2006-07 and 2010-11. Current non-North Sea revenue in Scotland is estimated to have grown by 6.9 per cent between 2006-07 and 2010-11 in nominal terms, compared to 6.4 per cent in the UK as a whole. However, the effect of the recession on public finances is clearly visible, with non-North Sea revenues falling in both Scotland and the UK during 2008-09 and 2009-10. However, receipts recovered in 2010-11 and grew to exceed their 2007-08 pre-recession peak in cash terms.

Table 3.3: Current Revenue: Scotland and UK 2006-07 to 2010-11

(£ million)
Scotland UK
2006-07 2007-08 2008-09 2009-10 2010-11 2006-07 2007-08 2008-09 2009-10 2010-11
Income tax 10,445 11,267 10,609 10,119 10,634 140,927 152,028 143,791 140,606 146,628
Corporation tax (excl North Sea) 3,254 3,525 2,841 2,678 3,114 37,307 40,384 32,493 29,968 34,661
Capital gains tax 204 341 589 135 244 3,812 5,267 7,851 2,504 3,589
Other taxes on income and wealth 258 246 249 213 362 2,970 2,717 2,741 2,360 6,177
National insurance contributions 7,303 7,841 7,990 7,819 8,018 90,916 95,437 96,613 96,638 97,755
VAT 7,606 7,922 7,430 7,311 8,560 87,740 89,896 85,350 83,710 97,277
Fuel duties 1,975 2,096 2,087 2,230 2,339 23,586 24,905 24,615 26,197 27,256
Stamp duties 709 893 595 515 595 13,390 14,121 8,001 7,901 8,931
Tobacco duties 966 894 893 942 985 8,146 8,031 8,358 8,805 9,131
Alcohol duties 725 745 764 884 895 7,914 8,215 8,598 9,246 9,434
Betting and gaming and duties 107 109 104 109 113 961 961 994 1,029 1,069
Air passenger duty 94 164 154 157 183 1,112 1,949 1,835 1,870 2,183
Insurance premium tax 195 194 191 190 210 2,304 2,302 2,271 2,261 2,511
Landfill tax 78 90 82 85 99 825 897 863 944 1,094
Climate change levy 63 65 65 62 61 696 705 711 687 660
Aggregates levy 52 58 53 52 54 324 339 321 276 292
Inheritance tax 227 269 178 146 159 3,618 3,890 2,931 2,431 2,722
Vehicle excise duty 411 436 458 466 470 5,139 5,412 5,602 5,692 5,789
Non-domestic rates 1,741 1,724 1,736 1,822 1,891 19,846 20,414 21,990 22,664 22,682
Council tax 1,859 1,936 1,960 1,960 1,986 22,466 23,635 24,652 25,214 25,730
Other taxes, royalties and adjustments 511 569 601 695 694 5,688 6,239 6,830 8,014 8,073
Interest and dividends 564 767 606 206 183 6,605 8,942 7,069 2,410 2,151
Gross operating surplus 2,528 2,624 2,739 2,722 2,934 22,247 23,074 23,392 23,697 25,371
Rent and other current transfers 397 393 416 397 395 1,721 1,675 1,933 1,723 1,711
Total current revenue
(excluding North Sea revenue)
42,272 45,167 43,391 41,916 45,177 510,260 541,435 519,805 506,847 542,877
North Sea revenue                    
Per capita share 754 629 1,087 545 736 8,924 7,464 12,925 6,491 8,786
Geographical share 7,503 7,115 11,740 5,930 7,951 8,924 7,464 12,925 6,491 8,786
Total current revenue (including North Sea revenue)                    
Per capita share 43,026 45,796 44,479 42,462 45,914 519,184 548,899 532,730 513,338 551,663
Geographical share 49,776 52,282 55,131 47,846 53,128 519,184 548,899 532,730 513,338 551,663

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