Tax Advisory Group minutes: August 2025

Attendees and apologies

• Dave Moxham, Deputy General Secretary at the Scottish Trades Union Congress
• Charlotte Barbour, former President of the Chartered Institute of Taxation
• Stuart Adam, senior economist at the Institute for Fiscal Studies
• Prof. David Heald, Emeritus Professor in the Adam Smith Business School, University of Glasgow
• John Wood, Director of Membership and Resources, COSLA

Apologies 

 

• Dr. Jim McCormick, Chief Executive of the Robertson Trust
• Aidan O'Carroll, Chair of Revenue Scotland and former Chair of the Institute of Directors in Scotland
• Prof. Mairi Spowage - Professor of Practice at the University of Strathclyde and Director of the Fraser of Allander Institute. 
• Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce

Officials

 

• Lucy O'Carroll, Tax Director 
• Head of Tax Policy Cohesion, Coordination & Capability
• Head of Business Development, Revenue Scotland
• Council Tax Team Leader

Items and actions

Welcome and apologies

Lucy welcomed members and reminded them about the upcoming Tax Conference on 10 September.

Presentation and discussion: Council Tax reform engagement programme and next steps

Lucy invited officals to present an update on work underway on Council Tax reform. Throughout the presentation, members were invited to offer views. Key points raised have been grouped by theme:

Accountability and progressivity

It was highlighted that Council Tax funds local authorities who are accountable to electors in the area. It was further noted that the accountability link may be removed if Council Tax is viewed as a tax on the owner. A counter point was raised, noting that very few taxes are incident on local residents and caution should be taken on linking these taxes too closely to local accountability.

The issue of progressivity and regressivity of Council Tax was raised. It was noted that progressivity can be measured either in relation to property value or income – with the question of which is important determined by the objectives of the tax.

Impact of Council Tax on owners vs. occupiers

There was discussion of whether Council Tax ultimately impacts on owners or occupiers. While occupiers would view themselves as paying the tax, the view of the IFS is that inelastic supply of housing means that the rents adjust such that the cost is ultimately borne by the owner.

It was also noted that Council tax rates are determined by the value of the property, whilst eligibility for Council Tax discounts is based on the characteristics of the property occupier.

It was noted that shifting the formal liability from occupiers to owners may have impacts on rents and house prices. From a tax administration perspective, there are likely pros and cons to adopting this approach, while the interaction with reliefs would have to be considered.

Implications of reform

It was noted that any revaluation would have to consider the disparate impacts it could have, including in relation to geographical differences in growth in property values.

The challenge of obtaining political consensus for reform or revaluation was raised, though it was noted that the Welsh Government have undertaken one revaluation and are preparing for a second.

Council Tax Reduction (CTR) was discussed. It was noted that adding more bands (making it more progressive) could reduce the need for, but that people may be reluctant to lose access to the reduction.

It was noted that the public’s understanding of the current 1993-level valuation was low. It was further noted that there is a perception that rising housing prices will mean higher council taxes after revaluation, though that is not necessarily the case.

Mitigation schemes

It was noted that the Cabinet Secretary for Finance and Local Government had reiterated the importance of mitigation schemes, and a soft landing for transitions, at the Finance and Public Administration Committee. A range of options exist including a phased transition, introduction of a deferral scheme and expansion of Council Tax reliefs

The practicality of a deferral scheme was discussed. It was noted that such a scheme could be vulnerable to decisions by later Parliaments to cancel the scheme. It was also highlighted that delaying transfer of funding to the public sector could cause issues under the Fiscal Framework.

AOB

 

Lucy thanked members for a rich discussion. Members offered no additional items under AOB.

Lucy reminded members that the next meeting on 21st October would consider future priorities for the tax system.

Lucy also noted that members would be contacted on plans for TAG in 2026.