Administration Of Scottish Income Tax 2021/22

12th January 2023

The National Audit Office (NAO) has published a report- Opens in a new window today on HMRC's administration of Scottish income tax, including the final calculation of Scottish revenues for the 2020/21 tax year.

The Auditor General for Scotland, Stephen Boyle, provides additional assurance to the Scottish Parliament on the work of the NAO in this area.

In his accompanying report, he says the NAO's approach was reasonable and covered the key audit risks. He also draws attention to the main findings in the NAO report, including:

The Scottish income tax outturn for 2020/21 is £11.948 billion
HMRC's provisional estimate of Scottish income tax for 2021/22 is £13.295 billion. This is within one per cent of the Scottish Fiscal Commission's most recent forecast for the year, which the Scottish Government uses to set its budget.

Both the NAO and Auditor General reports will be presented to the Scottish Parliament's Public Audit Committee.

Stephen Boyle, Auditor General for Scotland, said, "I am pleased that the NAO has been able to report that HMRC has implemented adequate processes and that the outturn of income tax for 2020/21 is fairly stated.

Given ongoing economic uncertainty and differences between Scottish and UK tax policies, it's important that the Scottish Government and HMRC keep working together to improve the data around the behaviour of Scottish taxpayers.

The Scotland Act 2016 gave the Scottish Parliament power to determine the rates and thresholds (excluding the personal allowance) paid by Scottish taxpayers on all non-savings, non-dividend income from 6 April 2017. For 2021-22, the top rate tax band in Scotland stayed at £150,000. All other tax bands increased by between approximately 0.5% and 0.6%, similar to the increases for the rest of the UK. HM Revenue & Customs (HMRC) administers and collects Scottish income tax as part of the UK tax system.

Read the full report HERE