Tax Advisory Group minutes: October 2025

Attendees and apologies

• Stuart Adam, senior economist at the Institute for Fiscal Studies
• Aidan O'Carroll, Chair of Revenue Scotland and former Chair of the Institute of Directors in Scotland
• Professor Mairi Spowage, Director of the Fraser of Allander Institute
• Professor David Heald, Emeritus Professor in the Adam Smith Business School, University of Glasgow

Apologies 

• Dave Moxham, Deputy General Secretary at the Scottish Trades Union Congress
• Dan Neidle, founder of Tax Policy Associates
• Charlotte Barbour, President of the Chartered Institute of Taxation
• Dr Jim McCormick, Chief Executive of the Robertson Trust
• Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce

Items and actions

Welcome & apologies

Lucy welcomed members and noted apologies from Jim McCormick, Charlotte Barbour, Liz Cameron and Dave Moxham. Lucy also noted no response from Dan Neidle.

Minutes of last meeting

Lucy asked for confirmation that members were content to issue the minute of August’s meeting. This was agreed with no additional comments by members.

Update: wealth tax and future devolution of tax powers

Lucy invited officials to present a short update on work underway around taxation of wealth and future devolution of tax powers. Following the presentation, Lucy invited members to offer views.

It was suggested that a clear definition of wealth, within a Scottish context, was an important first step. It was noted that definitions of wealth taxes themselves are wide ranging, covering taxes on, for example, returns of wealth, transfers of wealth, uses of wealth and so on. It was highlighted that it was important to consider definitions in the context of the UK Government’s definition of wealth as well as the existing suite of wealth taxes such as capital gains tax. Once definitions are agreed, it becomes more possible to consider the behavioural impacts of various options. 
A question was raised around the proposed literature review of wealth tax research, particularly in relation to what this add to the picture, given the body of extant research. It was highlighted that conversations around wealth tax tend to focus on a limited set of options. The literature review would help get people on the same page and move the conversation forward.

It was suggested that it would be useful to consider three layers of analysis: wealth taxes controlled by the UK Government, and what the behavioural patterns for these are/whether they raise as much as expected; existing taxes controlled by the Scottish Government which tax wealth or those who are seen as wealthy; and which novel areas would be most worthy of detailed consideration for additional taxation in Scotland, with land and property likely to form part of this.

In relation to how much wealth taxes may raise, members felt that it would be useful if research could challenge assumptions on how much wealth tax might raise. It was also suggested that to raise substantial amounts from tax generally, a substantial proportion of the population need to contribute. 

It was also noted that further devolved tax powers would likely come with Block Grant Adjustments, and if so the powers would not necessarily provide additional funds for the Scottish Government. Building on this, it was noted that there is limited public understanding of the interactions devolved taxes have with the fiscal framework and block grant adjustments.

It was also noted that local and business taxation should be part of the consideration for wealth taxation. 

Discussion: impacts of UK Gov Budget and views on the Scottish Budget 2026-27

Lucy invited officials to present a summary of some of the speculative tax changes which are circulating in advance of the UK Budget. Following the presentation, Lucy invited members to consider what, if anything, the Scottish Government should consider in advance of the UK Budget. 

It was noted that a freeze in the income tax personal allowance was a more likely option for the UK Government and therefore some consideration should be given to the potential impacts in Scotland. 

Overall, members noted that, given the devolution arrangements and uncertainty on what would be announced, there were limitations to the Scottish Government ability to prepare. This protracted period of uncertainty was noted to have a significant impact on business and investment, due to the protracted period of uncertainty. 

Turning to the Scottish Budget, it was highlighted that business concerns were chiefly around increases to employer’s national insurance and employee rights legislation, rather than Scottish Income Tax. Future income tax reconciliations were flagged as a risk which ought to be factored into Budget preparations. 

AOB

Lucy thanked members for a useful discussion. The Tax Conference was highlighted as a successful event and hopefully one that would support building a community around the tax system in Scotland. A final meeting of the TAG is planned for 2026, chaired by the Cabinet Secretary for Finance and Local Government. More details will be issued to members shortly.