Government Expenditure & Revenue Scotland 2012-13

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 Finances published in February 2014.


This annex outlines the methodologies used to estimate public sector revenue in Scotland. As the issue of North Sea revenue has been discussed extensively in Chapter 4, this annex focuses on all other elements of public sector revenue.

In contrast to public sector expenditure, there is no one generic approach to estimating public sector revenue in Scotland; instead each revenue stream is estimated using a separate methodology. This annex discusses these techniques. It should be noted that, as the underlying datasets used in GERS have been subject to revision and update, estimates may differ from previous editions of GERS even if the methodology has remained unchanged. Revisions to the estimates of Scottish public sector revenues from the previous edition of GERS are discussed in Annex C.


As highlighted in Chapter 3, the vast majority of public sector revenue raised in Scotland is collected at the UK level by HM Revenue and Customs.

In some cases, revenue figures can be obtained for Scotland directly. Examples include local government revenue and particular elements of public corporation revenue. Such revenues are the exception and separate identification of most other revenue streams for Scotland is not possible. GERS therefore uses a number of different methodologies to apportion revenues to Scotland. In doing so, there are often theoretical and practical challenges in determining an appropriate share to allocate to Scotland. In certain cases, a variety of alternative methodologies could be applied each leading to different estimates. A comparison of the apportionment methodologies used in this publication to the new experimental estimates by HMRC of the breakdown of taxes collected in the four countries in the UK is provided in Box 3.1.

Obtaining an estimate of public sector revenue in Scotland is a two-stage process.

In the first stage, the UK outturn figure for each element of revenue is obtained from ONS Public Sector Finances Statistical Bulletin. In the second stage, Scotland's share of the UK figure is estimated according to a specific apportionment methodology. The methodology used differs for each element of revenue. The detailed revenue methodology paper on the GERS website contains a discussion of the apportionment methodology used for each revenue stream.[30]

UK Revenue Figures

The basis for estimating public sector revenue for Scotland is National Statistics outturn figures for UK fiscal revenue taken from ONS Public Sector Finances Statistical Bulletin. The detailed components, revenue by revenue, are taken from an ONS database (PSAT2) which is produced on a quarterly basis. The fiscal balance calculations in GERS are constrained to the UK Public Sector Finances Statistical Bulletin published in February 2014. An accounting adjustment is applied to both the expenditure and revenue totals so that both sides of the fiscal balance calculations are presented on a consistent basis. The revenue accounting adjustment is very small and has been included in 'other taxes, royalties and adjustments'.

These data are presented on an accruals basis and separately identify revenue attributed to central government, local government and public corporations. The international standards for National Accounts and Government Finance Statistics use the accruals basis rather than a cash approach. This is because accruals accounting reflects a more accurate picture of when revenue is due and spending occurs. In contrast, the alternative cash measure is more volatile as it, for example, records when bills are settled rather than when the expenditure occurs.

Summary of Apportionment Methodologies

Table A.1 provides a summary of the apportionment methodologies used for each element of revenue and highlights whether or not the methodology has changed since the previous edition of GERS.

In some instances ONS's Public Sector Finances Statistical Bulletin estimates of UK revenue for some taxes have also been revised since the last edition of GERS. These changes will affect the estimates of Scottish tax revenue. In addition, there have been revisions to some of the data sources used to apportion tax revenues to Scotland. This means that there have been small changes in the share of some UK taxes apportioned to Scotland since GERS 2011-12. Information on the scale of revisions is provided in Annex C.

More detailed information on the methodologies used and the changes introduced can be found in the Revenue Methodology paper on the GERS website.

Table A.1: Apportionment Methodologies and Sources for Public Sector Revenue in Scotland (Excluding North Sea Revenue)

Revenue Apportionment Methodology Source Changed
Income tax Scottish share of UK income tax liabilities applied to income tax gross of tax credits. Negative expenditure on tax credits estimated using Scot/UK share of overall spend on tax credits (negative tax plus benefits) Survey of Personal Income (SPI): HMRC and Scottish Government analysis
Data on overall spend on tax credits: HMRC
Corporation tax (excl. North Sea) Scotland's share of profits (less holding gains) of UK corporations Regional Accounts: ONS No
Capital gains tax Actual outturns for Scotland HMRC No
Other taxes on income and wealth Various (see web annex) Various (see web annex) No
National insurance contributions Estimates of employer, employee, class 2 and class 3 NIC revenue in UK and Scotland Supplied directly by HMRC No
VAT VAT net of LG and CG refunds: Scotland's share of UK household VAT expenditure
LG refunds: Scotland's share of UK LG current expenditure on goods and services
CG Refunds - MoD: Scotland/UK populations
- NHS: Scotland/UK TES for Health
- Other Gov depts: Scotland/UK total TES (Excluding NHS/MoD)
Living Costs and Food Survey: ONS

Public Sector Finances: ONS
Fuel duties Scotland's share of road traffic fuel consumption Fuel consumption statistics: DECC No
Stamp duties Land and property stamp duty: Actual outturns for Scotland
Stocks and shares: - Scotland/UK ratio of adults owning shares
Land and property stamp duty: HMRC
Stocks and shares: Family Resources Survey (DWP)
Tobacco duties Spend on tobacco in Scotland/UK Living Costs and Food Survey: ONS No
Alcohol duties Consumption of alcohol in Scotland/UK Family Food Survey, DEFRA Yes
Betting and gaming duties Spend on betting and gaming in Scotland/UK Living Costs and Food Survey: ONS No
Air passenger duty Scotland's share of passengers by air passenger duty band Civil Aviation Authority and HMRC No
Insurance premium tax Spend on insurance Scotland/UK Living Costs and Food Survey: ONS Yes
Landfill tax Scotland's share of UK tonnage of waste sent to landfill Scottish Environment Protection Agency, Environment Agency, Dept. of Environment in Northern Ireland No
Climate change levy Electricity: Scotland's share of UK electricity consumption by commercial and industrial users
Gas: Scotland's share of UK gas sales to commercial and industrial users
Solid and other fuels: Scotland's share of UK (less extra-regio) GVA
Electricity: DECC
Solid and other fuels: Regional Accounts: ONS
Aggregates levy Scotland's share of UK's aggregate production United Kingdom Minerals Yearbook 2012: British Geological Survey Yes
Inheritance tax Actual outturns for Scotland HMRC No
Vehicle excise duty Scotland's share of total value of UK vehicle licences issued (less refunds) DVLA No
Non-domestic rates Actual Data Scottish Local Government Finance Statistics No
Council tax Actual Data Scottish Local Government Finance Statistics No
Other taxes, royalties and adjustments Various (see web annex) Various (see web annex) No
Interest and dividends For Public Corporation (PC) receipts: Scotland's share of public sector UK GVA Regional Accounts: ONS No
For LG and CG receipts: Scotland/UK population ONS
Gross operating surplus CG: Scottish/UK share of central government NMCC
LG: Scottish/UK share of local government NMCC Public corporations
- individual data for Scottish PCs
- data for UK-wide PCs based on relevant industry GVA
- and actual data for Local Authority housing rentals
CG: ONS Regional Accounts
LG: ONS Regional Accounts
PC: Supplied by Public Sector Finance team: ONS, and Regional Accounts: ONS
Rent and other current transfers (excluding oil royalties and licence fees) Various (see web annex) Various (see web annex) No
North Sea revenue See Chapter 4 See Chapter 4 No


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