Scottish Public Finance Manual

The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds.

FGN2017/06 SPFM amendments: June 2017

The purpose of this note is to announce recent amendments to the Scottish Public Finance Manual (SPFM) as follows:


Annex 3:NDPB Model Framework Document

The NDPB Model Framework document has been updated to align with recent relevant policy and legislative changes.

Annual Accounts:

Annual Accounts

This update to the Annual Accounts, Scottish Government Consolidated Accounts section of the SPFM is to highlight the important role Boards have to play in approving annual accounts and in helping to ensure Ministers are provided with the annual report and accounts required to be laid before the Scottish Parliament. This is in conjunction with the role of the Accountable Officer of the public body and the responsibility for signing the accounts and ultimately responsible to the Scottish Parliament for their actions.

Tax planning and avoidance: 


This section of the SPFM gives guidance on tax related issues that may arise in the context of procurement.  The guidance is aimed at constituent parts of the Scottish Administration (i.e. the core Scottish Government, the Crown Office and Procurator Fiscal Service, Scottish Government Executive Agencies and non-ministerial departments) and bodies sponsored by the Scottish Government.  It should also be taken into consideration by other organisations to which the SPFM is directly applicable.

The section about procurement has been changed to reflect updated procurement legislation from 2015/16.  It also describes a change to the UK intermediary’s tax legislation (known as IR35) which took effect on 6 April 2017.  The change moves responsibility for assessing whether the IR35 might apply to temporary or interim workers engaged in the public sector through an intermediary company (typically a personal service company or PSC) from the PSC to the public body.

Specific areas of interest are:

  • 6. Key Points – Cross refers to paragraph 12 which is about excluding bidders.

  • 12. Procurement – Updates those references to procurement legislation which describe the circumstances, or grounds, for excluding bidders from public contracts.

  • New paragraphs 13 and 14 –  Describe how public bodies should handle the deduction of employment taxes for interim or temporary workers in the public sector.  This is where those workers are engaged through a PSC and where the IR35 rules apply.  Paragraphs 13 and 14 specifically make clear the circumstances when either the public body itself, or a recruitment agency, should deduct employment taxes.  The paragraphs also describe a clause that might be used in different scenarios (e.g. procurement or recruitment) where temporary or interim workers are brought in to fulfil a role in the public sector.  The changes described in paragraphs 13 and 14 apply to public bodies in Scotland defined by the Freedom of Information (Scotland) Act 2002.

More background about the IR35 rule change can be found at Scottish Procurement Policy Note (SPPN) 02/2017.


Scottish Government Finance Directorate

June 2017

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