JOHN Swinney’s flagship plan to replace stamp duty has been hit by staffing and IT problems which could increase collection costs and delay its implementation, a new report has warned.
Opposition politicians urged the Finance Secretary to make a statement to Holyrood to address the “shambles” they say has engulfed Scotland’s new taxes.
The call was made in advance of an Audit Scotland report which today identifies a series of problems with Mr Swinney’s Land and Buildings Transaction Tax (LBTT).
The report examined plans to introduce LBTT and to devolve landfill tax to Edinburgh at the beginning of April next year. Both taxes are to be introduced alongside a new tax-collecting agency – Revenue Scotland – as part of the 2012 Scotland Act.
Audit Scotland reported that the set-up costs for the new devolved taxes had increased by £1.1 million to £4.3m.
The public spending watchdog’s report found there were delays in getting the IT system to collect and administer the taxes.
It also found that the staff required to manage the programme were not in place early enough and observed that Revenue Scotland was developing contingency plans.
The report said there was a risk that the IT system for collecting the devolved taxes would not be fully implemented by 1 April next year.
It added: “There was no clear resourcing plan setting out the number, positions and grades of staff required.”
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The report said delays in hiring staff and procuring an IT system increased the risk they will not be “effectively managed” when they come into force.
This could result in tax payments taking longer to process and increased costs of collection, the report states.
LBTT will see around 450 to 600 transactions every day and £441m collected each year. Landfill tax will see £117m collected each year.
“Given the large volume of transactions anticipated, any move away from the electronic processing of LBTT is likely to have cost and performance implications,” the report said.
Looking ahead to the devolution of a Scottish rate of income tax in 2016, the report noted that the Scottish Government had just one member of staff working on it – a position that had to be reviewed.
Iain Gray, Labour’s finance spokesman, said: “John Swinney must take responsibility for the catalogue of failings highlighted by Audit Scotland. This report blows a hole in any credibility the Scottish Government had left.
“We know the Scottish Government’s obsession with independence has put them on pause, and this report confirms that. It’s staggering that part of the failure is a result of too many staff having other commitments – perhaps if civil servants hadn’t been instructed by their political masters to focus on the referendum then plans to make sure tax is collected would not be in the shambles they are.
“The SNP has spent the last three years calling for more tax-raising powers. This is laughable given their inept stewardship of the ones they already have. This is money that goes to support schools and hospitals, and John Swinney must make an immediate statement on what steps he is going to take to make sure that this shambles is put right.”
Conservative finance spokesman Gavin Brown said: “The cabinet secretary must make a statement to the Scottish Parliament on this, because the findings in this report are alarming. This goes live in April, and now we learn the IT programme is months behind schedule.
“It seems there could be a situation where Revenue Scotland might have to resort to using paper in the absence of a competent IT system.”
Mr Swinney said today’s report showed that Revenue Scotland was “on track” to manage collection of the new taxes.
“Establishing a new tax collection agency from scratch is a major operation – Revenue Scotland staff are rising to that challenge and I welcome Audit Scotland’s recognition of the excellent work done on policy development and legislation,” he said.
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