Scottish Aggregates Tax - proposed administration regulations: consultation analysis

3. Summary of Responses – RSTPA and Tax Tribunal Regulations

Background

3.1 The Revenue Scotland and Tax Powers Act 2014 (RSTPA) makes provisions for a Scottish tax system to enable the collection and management of Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) - “the devolved taxes”. It established Revenue Scotland as the tax authority responsible for collecting Scotland’s devolved taxes from 1 April 2015. It put in place a statutory framework which applies to the devolved taxes and sets out the relationship between the tax authority and taxpayers in Scotland, including the relevant powers, rights and duties.

3.2 SAT is intended to come into force on 1 April 2026, as the third devolved tax. Changes are therefore required to the RSTPA to ensure that SAT is operationally effective with regards to the wider devolved taxes legislative regime.

3.3 The following sections 3.A. – 3.E., set out the proposed changes to the Revenue Scotland and Tax Powers Act 2014 (RSTPA) regulations^[17] and the First-tier Tribunal for Scotland Tax Chamber regulations^[18].

A. The Revenue Scotland and Tax Powers Act (Record Keeping) Regulations 2015

3.4 The Revenue Scotland and Tax Powers Act (Record Keeping) Regulations 2015^[19] make provisions about records which must be kept in relation to the existing devolved taxes.

3.5 The SAT administration regulations make provision for adding record-keeping requirements for SAT. The relevant power is provided at Revenue Scotland and Tax Powers Act 2014 s74(9)^[20].

3.6 The consultation posed the following questions:

Questions

30. Do you agree that the provisions as drafted work as intended?

31. If not, what amendments would you propose to the draft legislation and on what basis?

32. Do you agree with the records to be retained for the purposes of the Scottish Aggregates Tax?

33. Do you agree with the records to be retained in relation to claims for credit, and for evidence of exempt status for the tax?

3.7 One respondent agreed that the provisions as drafted work as intended (question 30).

3.8 No answers were received to question 31.

3.9 One respondent answered ‘Yes’ to question 32 on whether they agree with the records to be retained for the purposes of SAT.

3.10 For question 33 the one respondent who answered agreed with the records to be retained in relation to claims for credit, and for evidence of exempt status for the tax.

Scottish Government response

3.11 Respondents agreed with the provisions as drafted; therefore, the Scottish Government has not made any amendments to these regulations.

B. The Revenue Scotland and Tax Powers Act (Involved Third Party) Order 2015

3.12 The Revenue Scotland and Tax Powers Act (Involved Third Party) Order 2015 regulations^[21] make provisions about the inspection of third parties related to taxable disposals for the purpose of Scottish Landfill Tax. The relevant power is provided at Revenue Scotland and Tax Powers Act 2014 s142(3)^[22].

3.13 The SAT regulations will add a provision for the inspection of involved third parties related to SAT.

3.14 The consultation posed the following questions:

Questions

34. Do you agree that the provisions as drafted work as intended?

35. If not, what amendments would you propose to the draft legislation and on what basis?

36. Do you agree with an involved third party being defined as a person involved (in any capacity) with the commercial exploitation of taxable aggregate?

3.15 One respondent answered question 34, and agreed that the provisions as drafted work as intended.

3.16 No answers were provided for question 35.

3.17 However, in relation to question 36 the respondent also elaborated that further clarification is required in the regulations on the definition of an involved third party.

Scottish Government response

3.18 The Scottish Government has not made any revisions to these regulations as drafted.

3.19 An involved third party is defined as a person involved (in any capacity) with the commercial exploitation of taxable aggregate.

C. The Revenue Scotland and Tax Powers Act (Postponement of Tax Pending a Review or Appeal) Regulations 2015

3.20 The Revenue Scotland and Tax Powers Act (Postponement of Tax Pending a Review or Appeal) Regulations 2015^[23] provide that where a review or appeal under part 11 of the Revenue Scotland and Tax Powers Act 2014 is in progress, a LBTT taxpayer may make an application to Revenue Scotland to postpone the payment of tax, penalty or interest. The relevant power is at Revenue Scotland and Tax Powers Act 2014 s245^[24].

3.21 The SAT regulation will apply the existing provisions to the Scottish Aggregates Tax.

3.22 The consultation posed the following questions:

Questions

37. Do you agree that the provisions as drafted work as intended?

38. If not, what amendments would you propose to the draft legislation and on what basis?

39. Do you agree that the provision to postpone the payment of tax, penalty of interest where a review or appeal is in progress should be extended to a Scottish Aggregates Tax taxpayer?

3.23 No responses were provided for questions 37 and 38.

3.24 The one respondent who answered question 39 agreed that that the provision to postpone the payment of tax, penalty or interest where a review or appeal is in progress should be extended to a SAT taxpayer (question 39).

3.25 A member of the SAT expert advisory group suggested that further clarification is required in the regulations on the time limits for reviews and appeals. Specifically, can the LBTT or SAT taxpayer appeal at any time during the review or will there be a time limit in which to appeal once the review has concluded and any assessments issued.

Scottish Government response

3.26 No amendments have been made by the Scottish Government to this set of regulations.

3.27 Taxpayers cannot appeal against a decision by Revenue Scotland to amend a self-assessed tax return while an enquiry is in progress and the enquiry has not been completed (see Revenue Scotland's guidance at RSTP1004^[25]). This is also the case whereby a review has not been concluded or treated as concluded (see Revenue Scotland's guidance at RSTP6006^[26]).

3.28 Revenue Scotland's guidance at RSTP6008^[27] details the time limits for giving a notice of appeal, which depends on the circumstances (i.e. if a review has been requested or not, if you have entered into a settlement agreement or mediation, and if an enquiry is in progress).

D. The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015

3.29 The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015^[28] relates to the date in which interest on unpaid tax is payable from.

3.30 The SAT administration regulations will make amendments to The Revenue Scotland and Tax Powers Act (Interest on Unpaid Tax and Interest Rates in General) Regulations 2015 to specify that interest is due from the date that the filing of the return is due. The relevant power is Revenue Scotland and Tax Powers Act 2014 s217^[29]. The proposed amendment would be the addition of an entry to the table at regulation 4 which specifies that interest is due from the date that the filing of the return is due.

3.31 The consultation posed the following questions:

Questions

40. Do you agree that the provisions as drafted work as intended?

41. If not, what amendments would you propose to the draft legislation and on what basis?

42. Do you agree with the amendment which specifies that interest on unpaid tax is due from the filing date?

3.32 One respondent agreed that the provisions as drafted work as intended (question 40).

3.33 No responses were provided for question 41.

3.34 The respondent also answered ‘Yes’ to question 42 on whether they agree with the amendment which specifies that interest on unpaid tax is due from the filing date.

Scottish Government response

3.35 Respondents agreed that the provisions as drafted work as intended; therefore, no revisions have been to the regulations.

E. Revenue Scotland and Tax Powers Act (Scottish Courts and Tribunal Service) (Amendment) Regulations

3.36 To ensure that taxpayers and their agents have access to administrative justice, two Tax Tribunals, with a First-tier and Upper Tribunal, were established by the Revenue Scotland and Tax Powers Act 2014 to hear appeals relating to LBTT and SLfT.

3.37 The First-tier Tribunal decides appeals against Revenue Scotland decisions, whereas the Upper Tribunal decides appeals on a point of law from decisions of the First-tier Tribunal, and the Scottish Courts and Tribunals Service provides administrative support for both.

3.38 The Scottish Tribunals are structured with the Tax Chamber of the First-tier Tribunal for Scotland and Upper Tribunal for Scotland led by the President of the Scottish Tribunals. Administrative support is provided by the Scottish Courts and Tribunals Service, and appeals are heard by the Members of the Tax Tribunals. Both the President and the Members have been appointed by Scottish Ministers.

3.39 The First-tier Tribunal for Scotland (Transfer of Functions of the First-tier Tax Tribunal for Scotland) Regulations 2017^[30] and The Upper Tribunal for Scotland (Transfer of Functions of the Upper Tax Tribunal for Scotland) Regulations 2017^[31] provide for the establishment of the Tax Tribunals to hear appeals and exercise other functions in relation to devolved taxes.

3.40 The SAT administration regulation would add provision for appeals to be heard regarding SAT.

3.41 The First-tier Tribunal for Scotland (Transfer of Functions of the First-tier Tax Tribunal for Scotland) Regulations 2017^[32] and The Upper Tribunal for Scotland (Transfer of Functions of the Upper Tax Tribunal for Scotland) Regulations 2017^[33] also transferred the functions of the First-tier Tax Tribunal and Upper Tax Tribunal to the First-tier Tribunal for Scotland and Upper Tribunal for Scotland and allocated to the Tax Chamber, which is where SAT appeals would be heard.

3.42 The consultation posed the following questions:

Questions

43. Do you agree that the provisions as drafted work as intended?

44. If not, what amendments would you propose to the draft legislation and on what basis?

45. Do you agree with the provision of Tax Tribunal appeals being heard with regards to the Scottish Aggregates Tax?

3.43 No answers were received for questions 43 and 44.

3.44 One respondent agreed with the provision of Tax Tribunal appeals being heard with regards to SAT (question 45).

Scottish Government response

3.45 Respondents agreed with the provisions as drafted; therefore, no revisions have been made by the Scottish Government to these regulations.