Tax Literacy – Communications Best Practice Guide

Annex A - Tax Literacy objectives

These are high-level goals for public understanding of tax and tax policy. They were based on an EU/OECD framework for financial literacy and adapted in collaboration with external stakeholders with expertise in tax and tax communication. They are designed to be used as part of the first step on the Tax Communications wheel: defining an objective. What is it you need people to understand? What do you want them to be able to do or find following your communication?

“Knowledge and Understanding” sets out the information people could gain through better communication on tax. “Skills and Behaviour” describes the kinds of things people could do as a result of gaining this improved knowledge and understanding. These two columns should be considered together, particularly when considering how to evaluate the impact of a communication.

In the table below, taxes have been categorised into two groups:

• “main” refers to the taxes most encountered by the average person on a regular basis: income tax, national insurance, council tax, Non-Domestic Rates (NDR), and VAT.
• “Other” taxes: Land and Buildings Transaction Tax (LBTT), inheritance tax, corporation tax and capital gains tax are listed separately, as taxes not so frequently encountered

The full EU/OECD framework also includes sections on broader financial education, including understanding of economic terms (recession, inflation) and economic institutions (central banks, governments).

Tax Literacy objectives

Knowledge and understanding

• Understands why taxes are collected and how they are used
• Understands which main taxes are currently devolved to Scotland and which main taxes are reserved to the UK
• Understands which main taxes are partially devolved e.g. Scottish Income Tax
• Has a high-level understanding of how the Fiscal Framework operates
• Knows how to check tax obligations and access to reliefs.
• Aware of current levels of main taxes
• When relevant, understands other taxes and how to check tax obligations

Skills and Behaviour

• Can source information on tax and spend policy
• Can source information on devolved and reserved taxes
• Can source information on personal and business tax obligations and reliefs.
• Pays taxes and/or claims refunds and reliefs as appropriate
• Can source information on main tax levels
• Can consider all main tax obligations in financial planning and decision making
• Can source information on personal and business tax obligations
• Can source information on other taxes