Scottish Aggregates Tax - proposed administration regulations: consultation analysis

4. Summary of Responses – Impact Assessments

Background

4.1 Section 4 detailed the impact assessments considered as part of the secondary legislation. These are set out in sections 4.A. – 4.K.

4.2 Views were sought on a range of issues to inform the relevant impact assessments to ensure that these are fully considered.

4.3 The consultation posed the following questions:

Questions

48. Do you think that the proposed amendments will in any way impact upon equal opportunities, the fairer Scotland duty, human rights including child rights and wellbeing, consumer duty, local government, island communities, privacy, digital approaches, and/or sustainable development in Scotland?

49. If so, please give us your views.

50. Do you have any feedback on the partial Business and Regulatory Impact Assessment (BRIA), included in Annex B?

4.4 No comments were received on questions 48 and 49, in relation to the following:

• Equal opportunities
• The Fairer Scotland Duty
• Human rights
• Child rights and wellbeing
• Privacy impacts
• Digital impacts
• Island communities
• Local government
• The Consumer Duty
• Sustainable development

4.5 Several comments were received from respondents and advisory group members, however, on the partial Business and Regulatory Impact Assessment (BRIA). Feedback was received from various stakeholders and members of the SAT advisory group in relation to question 50.

Business and Regulatory Impact Assessment (BRIA)

Section 1: Background, aims and options

4.6 On the ‘Rationale for Government intervention’ section one respondent noted that this could refer to a ClimateXChange research project which has been commissioned by the Scottish Government. This research project is on the potential role of alternatives to primary aggregates to deliver reductions in greenhouse gas emissions. The respondent highlighted that this section could refer to this research in relation to SAT and the Scottish Government’s circular economy objectives. This feedback was also received from members of the SAT expert advisory group.

Section 2: Consultation

4.7 No comments received on this section.

Section 3: Options

4.8 One respondent suggested that there could be greater quantification on the cost of the tax to business (in the section on ‘Costs’). They noted that the return requires more data and information to be collated by businesses than the UKAL return. They advised that expectations amongst affected business are that their compliance costs will double as they will have two registrations and two sets of returns. Similarly, this same point was raised in comments received from some members of the expert advisory group.

4.9 The part on ‘Scottish firms impact test’ details that Scottish Government and Revenue Scotland officials met individually with a number of firms involved in the production of primary aggregate to discuss aspects of the proposed secondary legislation. One respondent and several members of the SAT advisory group noted that it would be helpful to receive an update on the assessment of cross-border complexities and the cost to affected businesses following these visits. They similarly explained that information on the number of visits undertaken, and the methodology used to select which operators were approached / visited would be welcomed.

4.10 For the section ‘Digital Impact Test’, one respondent suggested it would be beneficial to clarify whether taxpayers will be able to work on returns offline.

4.11 On the ‘Post-implementation review’, one respondent expressed, in their view, that there will inevitably be complexities with cross-border transactions and operators who do not understand or realise the taxation requirements have changed. They queried how errors by operators will be addressed, where these have been made unintentionally. With regards to the legislation, they also asked how any unforeseen issues will be rectified once the tax is operational. They suggested that an annual Finance Bill would be helpful to avoid delays in legislative change. The respondent noted that, as with the other fully devolved taxes, changes may be required over time to cater for certain situations. Feedback was also received from some members of the SAT advisory group on how the tax will be reviewed post-implementation. Questions were raised regarding the intervals at which reviews will take place, how reviews will be conducted and the level of detail which will be used to assess the effectiveness of the tax.

Scottish Government response

4.12 Following stakeholder feedback, the BRIA has been revised to clarify several of the points above, as raised by consultation respondents and members of the expert advisory group. This includes:

• Greater reference to the ClimateXChange research on the role of alternatives to primary aggregates in reducing emissions from the construction sector;
• Further information on the test run of business forms and the engagement undertaken with stakeholders on the impacts of registration and the tax return; and
• Additional details on the post-implementation review and how the SAT advisory group will be used as a forum to review the operation of SAT prior to the introduction of the tax and on an ongoing basis after the tax is introduced.

4.13 As with the other devolved taxes, returns are submitted to Revenue Scotland via the Scottish Electronic Tax System^[34]. Therefore, a taxpayer will be required to log into this online portal to submit the requested information. However, in line with accessibility, Revenue Scotland offer a paper return for those unable to submit a digital return.

4.14 On the post-implementation review, the Scottish Government will work with Revenue Scotland to monitor the effectiveness of these regulations. The Scottish Government’s Framework for Tax^[35] principles inform our approach to decision making, engagement and how we manage and sequence tax policy and delivery. Following the introduction of SAT, the Scottish Government will continue to take full account of the Framework’s principles and objectives, which includes evaluation.