Tartan taxmen £4.5m over budget before they have collected a penny
THE cost of a setting up and running a new army of tax inspectors in Scotland has spiralled over budget – before even a penny has been collected.
Revenue Scotland comes into being on April 1 and will have responsibility for administering a limited range of taxes north of the Border.
Yet The Scottish Mail on Sunday can reveal that the bill for creating the new quango is already £4.5 million over budget.
And last night critics said Revenue Scotland was a political move intended to boost the case for independence.
From Wednesday, Revenue Scotland will take over responsibility from HMRC for collecting stamp duty and landfill tax.
New figures show that the total cost of setting up and running Revenue Scotland over its first five years will be £21.2 million, compared to the £16.7 million cost predicted in 2012.
Gavin Brown, finance spokesman for the Scottish Conservatives, said: ‘The Scottish Government’s primary justification for setting up a new quango was that it would save money for the Scottish taxpayer. Many were sceptical because setting up a new quango from scratch is rarely a money saver.
‘There are now question marks about the real reason for setting Revenue Scotland up from scratch. I think the Scottish Government wanted to have complete control over this agency so it could instruct it to do things it wants.’
The huge costs come despite the quango only being responsible for collecting only two taxes, Land and Building Transactions Tax – the Scottish replacement for stamp duty – and landfill tax. The two taxes are expected to be worth £550 million a year.
Jackie Baillie, Scottish Labour’s finance spokesman, said: ‘This is the latest in a long line of fantasy figures from the SNP. Their initial plans for the Land and Building Transaction tax didn’t add up and just this week Scottish Labour revealed that they are basing their plans for full fiscal autonomy by double counting.
‘Now we see that John Swinney’s projections for Revenue Scotland were out as well.’
Even when the Scottish parliament is handed extra powers over income tax, responsibility for collection will remain with HMRC.
But Revenue Scotland could assume responsibility for air passenger duty and aggregates levy when these two powers are transferred to Holyrood, as recommended by the Smith Commission.
Yesterday, it also emerged that Revenue Scotland does not have any back-up for its new IT systems.
Last year, Audit Scotland warned that there could be delays in payments being processed if IT systems failed. MSPs urged Revenue Scotland to set up a back-up plan.
But yesterday a Revenue Scotland spokesman said: ‘The IT system is ready and there was no need to invoke the contingency plan.’
It has employed 38 of the 40 staff it needs. They will be headed by a team of six senior staff costing £400,000, including the £95,000-a-year chief executive Eleanor Emberson.
A spokesman for Finance Secretary John Swinney said: ‘The basic set-up and running costs of Revenue Scotland have been agreed by Parliament. The plans include an IT system to support additional work to tackle tax avoidance and new measures to address illegal landfill dumping. We would have thought Labour would have supported tackling tax avoidance.’