Accountability Report 2020-21

Corporate Governance Report

The Directors’ Report

Revenue Scotland Board 2020-21

In line with paragraph 1 of Schedule 1 to the RSTPA, the Scottish Ministers are responsible for appointing between five and nine individuals to be members of the Revenue Scotland Board. One individual is appointed by Ministers as Chair.

Ministers determine the period and terms of appointment of Board members and may re-appoint individuals who already are, or have been on the Board, subject to evidence of effective performance and to their continuing to have the skills, knowledge and experience required on the Board at the time of reappointment.

Appointments are made following a public appointments exercise regulated by the Commissioner for Ethical Standards in Public Life in Scotland.

In the financial year 2020-21, Simon Cunningham was appointed to the Board on 1 January 2021 having previously been a co-opted member of the Audit and Risk Committee.

Dr Keith Nicholson – Chair (appointment concluded 31 July 2021)



Dr Nicholson is an internationally recognised scientist and award-winning company director with more than 30 years’ experience in statistical analysis and data modelling. He currently runs an independent consultancy providing strategic advisory services. His specialist background is in transactional websites, cyber security and technology.

Aidan O’Carroll – Chair (appointed 1 August 2021)

Aidan O’Carroll is a former senior partner at EY, one of the world’s largest professional services firms, which he left in July 2020 after 35 years. Formerly Head of Tax for EY in the UK, Aidan has advised both local and global companies across a wide spectrum of tax and business issues around the world. He is currently Scottish Chair of Institute of Directors and has a number of NonExecutive Director roles in organisations based in the UK. He has considerable experience in dealing with regulatory matters in both emerging and developed markets; he is also a regular contributor and speaker at business conferences.

Lynn Bradley – Chair of Audit and Risk Committee



Lynn Bradley is an accountant with more than 30 years’ experience in the Scottish public and private sectors. Previous roles include Director of Corporate Programmes and Performance at Audit Scotland and Chair of CIPFA Scotland. She currently lectures in the Adam Smith Business School at the University of Glasgow and is a member of the Institute of Chartered Accountants of Scotland (ICAS) Audit and Assurance panel. She is also a trustee of Cash for Kids (Radio Clyde).

Jean Lindsay – Member of Staffing and Equality Committee until 1 January 2021 when she became Chair



Jean Lindsay was previously the Director of Human Resources at the Forestry Commission. She is a Chartered Fellow of the Institute of Personnel and Development (FCIPD). She has experience in leadership, strategic people management, change management and corporate governance in the public sector. Mrs Lindsay is also a member of the Board of Crown Estate Scotland.

John Whiting CBE – Member of Audit and Risk Committee and Staffing and Equalities Committee

John Whiting was a non-executive director of HMRC until September 2019; he remains a director of the Taxation Disciplinary Board; until March 2017, he was Tax Director of the UK’s Office of Tax Simplification (OTS). Other previous roles include Tax Policy Director of the Chartered Institute of Taxation, many years as a tax partner with PricewaterhouseCoopers and membership of the First-tier Tax Tribunal.

Martin McEwen – Member of the Audit and Risk Committee

Martin McEwen is a Chartered Accountant and Tax Advisor. He is the Head of Tax at SSE plc and a member of their Finance Leadership Team. He joined the company in 2008 after a number of years at PwC. He is a regular speaker on tax transparency and responsible corporate tax behaviour. He has sat on both the Scottish Taxes and the Corporate Tax Committees at ICAS.

Simon Cunningham – Member of Audit and Risk Committee (co-opted member of ARC until 1 January 2021 when he became a full member of the Board)

Simon Cunningham is an experienced risk, audit and governance specialist and Chartered Accountant with audit and risk experience at Scott-Moncrieff, Aegon and McInroy & Wood. He is also a member of the ARC at the Scottish Courts and Tribunals Service, a member of the Board of Directors of the Free Church of Scotland Pension Scheme Trustees Ltd, and is a member of the Board of Compass Christian Centre Ltd.

Jane Ryder OBE – Chair of the Staffing and Equalities Committee (appointment concluded 31 December 2020)

Jane Ryder is a qualified solicitor and now specialises in corporate governance and regulation across the public, private and third sectors. Previous roles include being the first Chief Executive of the Office of the Scottish Charity Regulator (OSCR) and Deputy Chair of the Seafish Industry Authority. She is currently Chair of Historic Environment Scotland and of the Scottish Poetry Library, and a member of the Scottish Police Authority Board.

Ian Tait  – (appointment concluded 31 December 2020)

Ian Tait is Director of Network Regulation at the Water Industry Commission for Scotland and an independent member of Ofgem’s ESO Performance Panel. A regulatory specialist, he has advised the Scottish Government on the development of regulatory structures. Previous posts include Strategic Planning Manager and Transmission System Manager at Scottish and Southern Energy.

Further information about the interests of Board Members can be found on the Revenue Scotland website.

Senior Leadership Team 2020-21

Elaine Lorimer – Chief Executive

Elaine Lorimer joined Revenue Scotland as its Chief Executive in March 2016. She is an experienced Chief Executive who has more than 20 years leadership experience working at senior management and board level in the civil service and, prior to that, in local government in Scotland. She is a Scottish solicitor and public finance accountant.

Michael Paterson – Head of Tax

Michael Paterson joined Revenue Scotland in March 2019 and has lead responsibility for the administration and compliance of the devolved taxes, ensuring they are collected and administered efficiently and effectively. Michael has extensive knowledge and operational experience of UK taxes, particularly those dealing with international matters, resulting from 30 years as a senior tax professional with HMRC. His wide-ranging and senior tax roles have been in areas including technical, policy, investigations and management.

Mairi Gibson – Head of Legal Services

Mairi Gibson joined Revenue Scotland in February 2020. She has been a government lawyer since 1998. Over the years she been seconded to various posts within the Government Legal Service for Scotland including the Scottish Government Legal Directorate, Scottish Parliament and the Office of the Advocate General.

Neil Ferguson – Head of Corporate Functions

Neil Ferguson joined Revenue Scotland in January 2016 and has worked on the introduction of the Additional Dwelling Supplement, led the Air Departure Tax Programme and the Corporate Plan 2018-21. He previously worked on the devolved taxes legislation until 2015, on the Referendum Bill and the introduction of the Home Report which transformed the approach to buying and selling homes in Scotland.

Further information about members of the Senior Leadership Team can be found on the Revenue Scotland website.

Statement of the Accountable

Officer’s responsibilities Under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000, the Scottish Ministers have directed Revenue Scotland to prepare, for each financial year, a statement of accounts in the form and the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of Revenue Scotland and of its revenue and expenditure, statement of financial position and cash flows for the financial year.

The Chief Executive of Revenue Scotland is designated as the Accountable Officer for Revenue Scotland by the Permanent Secretary of the Scottish Government (SG), who is the Principal Accountable Officer for the Scottish Administration, in accordance with sections 14 and 15 of the Public Finance and Accountability (Scotland) Act 2000.

In preparing the accounts the Accountable Officer is required to comply with the requirements of the Government Financial Reporting Manual (FReM) and has:

• observed the Accounts Direction issued by Scottish Ministers, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• made judgements and estimates on a reasonable basis
• stated whether applicable accounting standards as set out in the FReM have been followed and disclose and explain any material departures in the financial statements
• prepared the accounts on a going concern basis

The responsibilities of an Accountable Officer, including responsibility for the propriety and regularity of the public finances for which she is answerable, for keeping proper records and for safeguarding Revenue Scotland’s assets, are set out in the Scottish Public Financial Manual.

The Accountable Officer may consult with the SG Chief Financial Officer (CFO) on any aspects of the duties applying to Accountable Officers in the Scottish Administration. The Accountable Officer must consult the CFO on any action which she considers is inconsistent with her duties on financial, regulatory or propriety grounds, and specifically where she seeks written authority from the Scottish Ministers or a direction from the Board of Revenue Scotland. In practice, the Chief Executive will delegate authority widely to other employees of Revenue Scotland but cannot, on that account, disclaim responsibility. The Chief Executive is responsible for informing the Principal Accountable Officer about any complaints about Revenue Scotland accepted by the Scottish Public Services Ombudsman (SPSO) for investigation and about the response to any subsequent recommendations from the SPSO.

I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information, and to establish that Revenue Scotland’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

I confirm that this Annual Report and Accounts, taken as a whole, is fair, balanced and understandable, and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.

Governance Statement

In the paragraphs below, I report on the governance arrangements in place within Revenue Scotland.

Governance Framework

Revenue Scotland is responsible for the administration and collection of Scotland’s wholly devolved taxes. The relevant powers and duties of Revenue Scotland, and of the Scottish Ministers are set out in the Revenue Scotland and Tax Powers Act 2014.

Scottish Ministers are responsible for appointing the Board of Revenue Scotland following a public appointment exercise, regulated by the Commissioner for Ethical Standards in Public Life in Scotland. Ministers must not direct, or otherwise seek to control Revenue Scotland in the exercise of its functions but they may give guidance. This guidance must be published and laid before the Scottish Parliament unless Ministers consider that to do so would prejudice the effective exercise by Revenue Scotland of its functions. Scottish Ministers are responsible for setting rates, bands and thresholds relating to the devolved taxes, subject to the approval of the Scottish Parliament.

The Board of Revenue Scotland is collectively responsible for the leadership and direction of the organisation and for ensuring that it carries out its statutory functions effectively and efficiently. It may delegate any of its functions to an individual Board member, a committee of the Board, the Chief Executive, or any other staff member, but it will retain its responsibility for carrying out its function.

As the Chief Executive of Revenue Scotland, I am employed by, and accountable to, the Board of Revenue Scotland for the day-to-day running of the organisation and its operational performance.

I am supported by the Senior Leadership Team (SLT), who oversee the day-to-day business of Revenue Scotland, with each member taking responsibility for a specific area. The SLT is made up of the Chief Executive, the Head of Tax, the Head of Corporate Functions and the Head of Legal Services.

Operation of the Governance Board and Committees

The Board is responsible for the functions and powers of Revenue Scotland and delegates authority to staff through a Scheme of Internal Delegation. The Board sets the strategic direction for the organisation, oversees Revenue Scotland’s work and monitors performance including the design and operation of risk and governance frameworks. They do this through scrutiny (and where appropriate) approval of:

• Corporate Plans and Business Plans
• key strategies and policies
• regular reports, including reports relating to risk management, performance, tax compliance, business continuity, staffing and health and safety, and changes in the devolved taxes
• scrutiny of the Annual Reports and Accounts
• reports from the Audit and Risk and Staffing and Equality Committees
• strategic engagement with key partners and customers

I can report that in the course of the year, the Board met on eight occasions (2019-20: ten) . During this time, the Board scrutinised a number of specific matters, including:

• making a number of significant decisions on LBTT and SLfT cases (in line with the Scheme of Internal Delegation)
• oversight of the implementation of the changes to LBTT rates
• oversight of litigation cases and the implications for the organisation following the outcome
• oversight of the significant changes to the organisation’s operating model in response to the COVID-19 pandemic – such as the suspension of penalties and debt pursuit, opening systems like SETS and contact management system to remote working, changes to policy on the acceptability of paper returns and payment by cheques, and the creation of an operations hub at St Andrew’s House etc
• how best to support the SEPA staff working with Revenue Scotland following the cyber-attack of December 2020
• strategic oversight of the Futures programme to establish a new way of working for the organisation in light of the experience of working remotely as a result of the COVID-19 pandemic

I can also report that, during 2020-21, in line with best practice, the Board and its Committees have reviewed their effectiveness and the Chair has conducted individual Board appraisals.

Audit and Risk Committee

The purpose of the Audit and Risk Committee is to support the Board and Accountable Officer by reviewing the comprehensiveness, reliability, and integrity of the assurances produced in support of financial reports. The terms of reference for the Committee are published on Revenue Scotland’s website within the Board Standing Orders.

The Committee fulfils its role through:

• scrutiny of risk management arrangements
• regular liaison with internal and external audit, and scrutiny of their plans and reports
• considering and monitoring of responses to recommendations from internal and external auditors and other bodies
• review of the certificates of assurance produced by management as part of the financial reporting process, and the Chief Executive’s Governance Statement
• overseeing the financial reporting process

Members of the committee in 2020-21 were Lynn Bradley (Chair), John Whiting (until May 2021), Martin McEwen and Simon Cunningham.

Simon Cunningham, who initially joined the ARC in November 2019 as a co-optee, was appointed as a member of the Board on 1 January 2021.

The Committee is also attended by the Chief Executive, Head of Corporate Functions, Head of Tax, Head of Governance, Chief Accountant, and representatives of internal and external audit as well as other staff members as required.

I can report that the committee met five times in 2020-21 (including a Special ARC to scrutinise the Annual Reports and Accounts) (2019-20: five).

The Committee reviewed its effectiveness using the checklist set out in the Scottish Government’s Audit Committee Handbook and found no issues of concern which could affect its normal function.

In the course of the year, I can report that the Committee actively engaged in a number of relevant matters, including:

• Internal and External Audit
• Review of the Corporate Risk Register
• 2020-21 Annual Report and Accounts

Whilst the approved Internal Audit Plan for 2020-21 was not completed fully as a result of COVID-19, the Plan was substantially completed with some advisory audit work being paused.

Staffing and Equalities Committee

The Staffing and Equalities Committee’s primary purpose is to provide assurance to the Revenue Scotland Board on the establishment and maintenance of an effective framework and systems for the remuneration, performance, evaluation and welfare of staff, including equality and diversity. The terms of reference for the Committee are published on Revenue Scotland’s website within the Board’s Standing Orders document.

The Committee comprised of three Board members (Jane Ryder, John Whiting and Jean Lindsay) until 31 December 2020 when Jane Ryder (Chair) completed her appointment. It is now comprised of two Board members – Jean Lindsay (Chair) and John Whiting. Staff attendees comprise the Chief Executive, Head of Corporate Functions, the Head of Tax, the Head of Legal Services who leads the Equalities group, the Head of People Services, and the Head of Governance who has responsibility for Health, Safety and Wellbeing. Further staff members attend as required.

I can report that the Committee met three times during 2020-21 (2019-20: four) and engaged in a number of relevant matters including scrutiny of:

• People Strategy 2020-21 Action Plan
• Development of the 2021-2024 People Strategy
• 2019 People Survey Action Plan; \ Workforce Planning
• Health and Safety and Wellbeing (including the provision of accredited H&S training for the Board and SLT)
• Development and delivery of the STEP programme.
• Equality and diversity
• HR resource

Assurances provided to the Chief Executive

I have received written assurances from members of my Heads of Service who have responsibility for the operation and effectiveness of internal controls within the Tax, Legal, and Corporate Functions teams. The assurances from Heads of Service continue to recognise the progress being made around the establishment of an appropriate and effective Health and Safety system for Revenue Scotland.

Whilst the 2019-20 annual report correctly highlighted the push toward complete compliance relating to all Health and Safety matters, I am confident that this has now been achieved in the period since last year’s report and that regular reports on performance and continued progress are now made to the SEC, Board and Senior Leadership Team (SLT). Progress in this area has been further cemented through the NEBOSH accredited training on H&S that was provided for the Board and SLT.

A wider training and awareness programme is being developed by the Committee. In a similar vein, the assurance statements received also highlight the progress made around embedding equalities policy and practice throughout the organisation, an important aspect of how we work and led by the Head of Legal Services as SLT sponsor.

I have also received specific assurance from the Head of Tax to confirm that internal controls around tax activities and decisions are working well, and through the support of the Tax Assurance Group (TAG) oversight of issues as they arise have been strengthened.

For those services which Revenue Scotland receives from the Scottish Government, I have received assurance from the Scottish Government’s Chief Financial Officer in respect of the financial systems, from the Scottish Government’s Director for People in respect of the human resources (HR) services and payroll systems shared with Revenue Scotland and from Scottish Government’s Director of Digital in respect of digital corporate services shared with Revenue Scotland. No issues of significance were raised with me as part of these.

I am satisfied that the progress made around the specific assurances sought in 2019-20 from the Director for People concerning the need for progress on concluding revised arrangements with Revenue Scotland that reflect our status as a separate employer have been progressed. Work in this area will be concluded in 2021-22. The Scottish Government is now investing significantly in this area and so as a client, we expect to benefit from this investment.

I have also received assurance from the Accountable Officer of the Scottish Environment Protection Agency in respect of the statutory functions delegated to them by Revenue Scotland. As a result of the cyber-attack on SEPA in December 2020, only limited assurances could be provided on the effectiveness of shared data controls, and the impact to SEPA (as regulator) of the Scottish Landfill Communities Fund (SLCF). Details of the actions taken and additional assurance requests made are set out at page 14 in the Risks and Issues section. No further issues of concern were raised by them.

These arrangements have been in operation throughout 2020-21, up to, and including the date of authorisation of these accounts.

In conclusion, I can confirm that, based on the aforementioned written assurances received, there were no other significant control weaknesses identified in the period under review.

Report on Personal Data Incidents

Revenue Scotland manages, maintains and protects all information according to the requirements of relevant legislation, its own information policies and best practice. Revenue Scotland has an Information Assurance governance structure which prioritises and manages information risks. The governance structure:

• protects the organisation, its staff and our customers from information risks where the likelihood of occurrence and the consequences are significant
• ensures adherence with statutory duties
• assists in safeguarding Revenue Scotland’s information assets

Revenue Scotland has a Senior Information Risk Owner (SIRO) and a number of Information Asset Owners (IAOs), who provide assurance to the SIRO that proper controls are in place. The SIRO role is to ensure information security policies and procedures are fit for purpose and are reviewed and implemented across all of Revenue Scotland’s business functions.

The IAOs are tasked with ensuring compliance with statutory duties, knowing what information assets they ‘own’ and what information they handle, along with the relevant security requirements, sensitivity, importance and protocols for sharing of information assets.

In addition, all staff are aware that they need to report any data breaches immediately to Revenue Scotland’s IAO and SIRO. They are required to undertake regular training and information sessions. A refresh of the training sessions was completed mid-year and a schedule of workshops was held with each team on assuring our data.

During the year, there was one incident that was notified to the Information Commissioner’s Office (ICO). The incident related to one taxpayer and a number of minor actions were agreed and implemented to reduce the risk of a re-occurrence.

In January 2021, Revenue Scotland stood up an Incident Management Group, which included the SIRO, in response to the cyber-attack on SEPA. It was established that there was no known direct impact on personal data held by Revenue Scotland. However it is understood that data relating to the Scottish Landfill Communities Fund was lost in the attack (although it has been possible to reconstitute some of the data that was lost). The Group focused on supporting SEPA colleagues impacted by the attack.

Further to the information provided above, Revenue Scotland also received two Subject Access Requests (SAR), seven Freedom of Information (FoI) requests, and one Environmental Information Request (EIR). The EIR was later challenged and following a formal review, the initial response was upheld.

Risk Management

I have assessed our risk management arrangements and confirm that they accord with the guidance set out in the SPFM. In addition, as part of the year end Certificates of Assurance process the assessment of risk throughout the year contributes to the overall confidence assessment offered, further confirming that robust arrangements and practices were in operation throughout the year 2020-21.

Parliamentary scrutiny

As a Non-Ministerial Office, Revenue Scotland is accountable to the Scottish Parliament and, as such, can be called to appear before parliamentary committees to provide updates on operational matters, give evidence on tax-related matters or provide written statements.

Revenue Scotland’s Corporate Plan, supporting legislation and this annual report are published documents. The Corporate Plan 2018-21, on which this document reports, was approved by Scottish Ministers and laid before the Scottish Parliament in April 2018, and this report will be laid before Parliament in December 2021.

Corporate Plans, all annual reports and accounts and minutes of the Revenue Scotland Board meetings are available to download on our website.

Internal Audit

The Internal Audit service is provided by the Scottish Government’s Directorate for Internal Audit and Assurance (DIAA). The Audit and Risk Committee reviewed and approved the audit plan produced by DIAA who present regular updates on progress of this plan to the Committee meetings. During the year, DIAA completed audits on the following:

• Governance and Compliance Review
• Review of Operational Changes Made as a Result of COVID-19

In terms of the overall assessment for each audit, “substantial” assurance was awarded to the audit on governance and compliance and to the audit on operational changes made as a result of COVID-19.

A follow-up audit was completed on:

• 2020–21 Cheque and Repayments Processes Review

Progress was made on the implementation of recommendations from this report meaning that controls in this area improved during the year.

Whilst the approved Audit Plan for 2020-21 was not completed fully as a result of COVID-19, the Plan was substantially completed with some advisory audit work being paused.

DIAA’s overall annual assessment of Revenue Scotland’s internal controls is ‘substantial’. This means that DIAA views Revenue Scotland’s risk, governance and control procedures to be effective in supporting the delivery of any related objectives. Any exposure to potential weakness is low and the materiality of any consequent risk is negligible. This indicates an improvement from the ‘reasonable’ assessment received last year. Progress on implementing Internal Audit recommendations has been steady but slower than expected. Most recommendations however, have been implemented during the year. The Audit and Risk Committee views the assessment as a fair reflection of Revenue Scotland’s position based on the evidence reviewed by DIAA.

External Audit

External Audit is provided by Audit Scotland. Mark Taylor, Audit Director is appointed under the Public Finance and Accountability (Scotland) Act 2000 to carry out the external audit of Revenue Scotland. During the year, the Audit and Risk Committee scrutinised Audit Scotland’s audit plan and received regular updates from them. The Independent Auditor’s Report can be found on page 83. As part of the 2019-20 audit undertaken by Audit Scotland of Revenue Scotland, five matters were highlighted for attention; namely:

Audit Scotland has reviewed these during their audit of 2020-21 and reported its conclusions in its Annual Audit Report 2020-21. Audit Scotland reported on internal controls in 2020-21 in its management report to the ARC in May 2021. Work is ongoing to address these recommendations.

Assessment of Corporate Governance

Revenue Scotland has developed a system of internal controls and policies which have been designed to safeguard its assets, data and ensure the reliability of financial records in relation to operational and tax duties. These controls are subject to review by management on a regular basis and undergo formal review by both Internal and External Audit, whose reports are made available to the Audit and Risk Committee.

I have assessed our corporate governance arrangements and confirm that they comply with generally accepted best practice principles and relevant guidance.

Risk Management

I can report that a number of issues arose during the year, and during the period before signing of the Accounts.

Responding to the COVID-19 pandemic to ensure continuity of business – the biggest challenge of 2020-21 was the need from March 2020 to respond proactively to the COVID-19 pandemic in order to maintain the successful delivery of our services to taxpayers and their agents. Revenue Scotland rapidly transitioned to a remote working model at this time, where the majority of staff successfully worked from home to deliver those functions that could be performed well in a remote environment. Although decision making had to be largely reactive and responsive due to the exceptional circumstances, Revenue Scotland continued to prioritise staff welfare and wellbeing in every decision made, to sustain delivery of our statutory functions, and to maintain excellent customer services throughout.

Delivering Legislative Change – increased pressure on our resources from legislative change was identified as an issue. A number of legislative changes were successfully delivered however, during 2020-21.

Litigation – in 2020-21, the progress of litigation cases was significantly affected by the COVID-19 pandemic and the national lockdown periods. Following a brief initial pause, Tribunal and court arrangements were quickly in place to enable electronic lodging of documents, and procedural and full hearings of cases to take place virtually.

Cyber-security – cyber-security continues to be a high priority for Revenue Scotland, as the related risks develop continuously. Revenue Scotland fully complies with the Scottish Government Cyber Essentials Plus framework to maintain continued accreditation. SEPA was the subject of a cyber-attack on 24 December 2020. In response to this, Revenue Scotland set up an incident management group to support SEPA colleagues and ensure continuity of business in the Scottish Landfill Tax function. Regrettably, data relating to the Scottish Landfill Communities Fund (SLCF) was lost in the cyber-attack. This has restricted our ability to report on the SLCF in this report. It was confirmed that some Revenue Scotland data had been lost during the attack, but the assessments indicated that the risks associated with this loss were low. Following a detailed systems check and information security risk assessment, assurance was provided that none of Revenue Scotland’s systems were affected by the cyber-attack. This past year has been incredibly challenging for Revenue Scotland as we responded to the developing health crisis and continued pressure on our resources. However, in spite of these challenges, Revenue Scotland continued to successfully deliver all of our statutory functions and deliver another strong performance against our KPIs and objectives. I am confident that as issues have arisen they have been appropriately dealt with. However, this has had an impact on the resources available for some of the priorities set out at the beginning of the year.

Remuneration

The remuneration of senior civil servants is set in accordance with the rules set out in chapter 7.1, Annex A of the Civil Service Management Code and in conjunction with independent advice from the Senior Salaries Review Body (SSRB). In reaching its recommendations, the SSRB is to have regard to the following considerations:

• the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities
• regional/local variations in labour markets and their effects on the recruitment and retention of staff
• government policies for improving the public services including the requirement on departments to meet the output targets for the delivery of departmental services
• he funds available to departments as set out in the Government’s departmental expenditure limits
• the Government’s inflation target
• evidence they receive about wider economic considerations and the affordability of their recommendations

Further information about the work of the SSRB can be found at www.ome.uk.com

The remuneration of non-senior civil servants within Revenue Scotland is set in accordance with Scottish Government Public Sector Pay Policy as part of the Scottish Government Main Bargaining Unit.

Revenue Scotland’s Board members and co-opted Committee members are non-executive and receive fees for duties on behalf of Revenue Scotland including attendance at Revenue Scotland Board and Committee meetings. Fees are paid at the daily rate set out in their letters of appointment. Expenses incurred in carrying out these duties are also reimbursed.

Fees of Board members, co-opted Committee members and salaries of the Senior Management Team are shown below:

(1) Simon Cunningham was a co-opted member of ARC prior to becoming a full Board member on 1 January 2021. The fees reported include those due for his time as a co-opted member of ARC

(1) Simon Cunningham was a co-opted member of ARC prior to becoming a full Board member on 1 January 2021. The fees for his time as a co-opted member of ARC for 2020-21 are include within the Board fees.

Non-executive Board members and co-opted Committee members are not employees of Revenue Scotland and do not benefit from pension arrangements.

FYE = Full Year Equivalent

(1); Stephen Crilly moved to a new post outwith Revenue Scotland on 1 December 2019

(2): Neil Ferguson was appointed to the Senior Leadership Team on 6 January 2020

(3): Andrew Fleming moved to a new post outwith Revenue Scotland on 5 January 2020

(4): Mairi Gibson joined Revenue Scotland on 3 February 2020

(5): Chris Myerscough left the Senior Leadership Team on 16 April 2019

(6): Michael Paterson was appointed to the Senior Leadership Team on 8 April 2019



None of the above received any benefits in kind or bonus payments in the year 2020-21 or 2019-20.

Salary covers both pensionable and non-pensionable amounts and includes: gross salaries; overtime; recruitment and retention allowances; or other allowances to the extent that they are subject to UK taxation and any ex-gratia payments. It does not include amounts which are a reimbursement of expenses directly incurred in the performance of an individual’s duties.

The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.

Fair Pay Disclosure

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation’s workforce.

The banded remuneration of the highest-paid member of the Senior Leadership Team in Revenue Scotland in the financial year 2020-21 was £100-105,000 (2019-20: £95-100,000). This was 2.9 times (2019-20: 2.9) the median remuneration of the workforce, which was £35,584 (2019-20: £34,087).

In 2020-21, no employee received remuneration in excess of the highest-paid member of the Senior Leadership team. Remuneration ranged from £23,000 to £101,000 (2019-20: £19,000-£96,000).

The median calculation includes directly employed staff paid through Revenue Scotland’s payroll. It covers both permanent staff and those on fixed term contracts and for 2020-21 it includes temporary agency staff paid locally by invoice. Figures including agency staff are not available for 2019-20 and therefore reflect only permanent and fixed term contract staff. The ratio is calculated as the mid-point of the highest band divided by the median total remuneration.

Pension Benefits

Pension benefits are calculated on normal retirement age (NRA) where the pension entitlement is due at that age or at current age if over NRA.

The above pension data was supplied to Revenue Scotland by MyCSP, pension administrators. 

Civil Service Pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has four sections: 3 providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 switch into alpha sometime between 1 June 2015 and 1 February 2022. Because the Government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the Cash Equivalent Transfer Values shown in this report – see below). All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a defined contribution (money purchase) pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate in 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages.)

Further details about the Civil Service pension arrangements can be found at the website www.civilservicepensionscheme.org.uk

Cash Equivalent

Transfer Values A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Staff report

Staff of Revenue Scotland are civil servants, part of the Scottish Administration, rather than the Scottish Government, and are required to adhere to the standards set out in the Civil Service Code applicable to staff in Non-Ministerial Offices in Scotland. The code sets out the framework within which all civil servants work, and the core values and standards of behaviour which they are expected to uphold.

Staff are appointed by Revenue Scotland and act under the direction of the Board of Revenue Scotland. Revenue Scotland is responsible for ensuring that staff recruitment arrangements are fair, open and transparent in line with the Civil Service Commissioners’ Recruitment Principles. All recruitment, including for Senior Civil Service posts, adhere to the Scottish Government’s recruitment policies and procedures.

Average number of people employed

The average number of full-time equivalent people employed during the year was as follows:

Staff numbers have been allocated as follows:

• administration – this is the general day to day running of Revenue Scotland which includes the costs associated with the collection and administration of tax.
• programme – reflects non-administration costs, this is the cost of implementing processes and systems to comply with new legislation.

The staff numbers shown above include the equivalent of 3 FTE members of staff who were temporarily seconded to Scottish Government working in positions related to the COVID-19 pandemic. Costs associated with these secondments were borne by Revenue Scotland and not recharged.

Staff Composition

The average number of people of each sex employed by Revenue Scotland by category is set out in the following table. The numbers include permanent and temporary staff.

*SLT – Senior Leadership Team

Gender Pay Gap

The gender pay gap is calculated as the difference between average hourly earnings of men and women as a proportion of average hourly earnings (excluding overtime) of men’s earnings. A positive pay gap means that men earn more than women on average.

The gender pay gap is a means of highlighting a disparity in the pay received by men and women and is influenced by both the pay levels for equivalent jobs and the distribution of men and women across the grades within the permanent workforce.

In 2021 the gender pay gap for Scotland was 11.5% (2020: 16.9%) and 15.4% (2020: 14.9%)5 for the UK. This is the median figure which is the standard figure used by the Office of National Statistics to calculate the pay gap.

The median gender pay gap for all staff at Revenue Scotland at the end of March 2021 is 17.5% (2020: 8.7%).

This means that the gender pay gap at Revenue Scotland has increased from 2020 and is slightly higher than the UK national pay gap. Substantial recruitment has taken place since the end of the reporting period and it is anticipated that the pay gap will reduce in due course.

Within Revenue Scotland, where men and women are undertaking work of an equal value (i.e. within the same pay range) they are paid a similar rate. The pay gap arises as a higher percentage of female staff are at lower grades than male staff, and the size of the organisation means that figures can be disproportionately affected by a small change in staff composition.

There is still further work required to reduce this gap. Revenue Scotland will continue to monitor the gender pay gap and related data such as the distribution of women and men across different grades and professions within the organisation. The pay gap is reported on within the annual report and every two years in the Revenue Scotland Equalities Mainstreaming Report. This information informs recruitment and retention strategies with a view to reducing the gender pay gap.

Strategies in place include supporting staff to attend the ‘Women in Leadership Conference’ and encouraging staff to attend events run by the Women in Tax Network, requirements for staff involved in recruitment to undertake ‘Unconscious Bias’ training and support for flexible working patterns.

Sickness Absence

Revenue Scotland recognises that the success of any organisation depends largely on the effective performance and full attendance of all its employees. People are a valued resource, and as an employer Revenue Scotland’s attendance management procedures are designed to maintain a happy, well-motivated and healthy workforce. The procedures are aimed to:

• be supportive and positive
• promote fair and consistent treatment for everyone
• encourage, assist and make it easy for people to stay in work
• explain employees’ entitlements and roles and responsibilities

In 2020-21 an average of 8.3 working days per employee were lost (2019-20: 11.5 days).

Staff Turnover

Staff turnover for contracted staff for the year ended March 2021 was 21.8% compared to 21.6% for the year ended March 2020. Approximately 50% of leavers during the year transferred to support business critical roles within Scottish Government arising from their response to the pandemic. A further 8% retired from the Civil Service.

Staff Engagement

Revenue Scotland participates in the Civil Service People Survey and includes the employee engagement index as one of the Key Performance Indicators. More information on this is given on page 38 under KPI7.

Employees with disabilities

Revenue Scotland complies with the Scottish Government’s Civil Service Code of Practice on the employment of people with disabilities. The code aims to ensure that there is no discrimination on the grounds of disability and that employment opportunities and career advancement is based solely on ability, qualifications and suitability for the work.

Diversity and equality

Equality and diversity are central to the way that Revenue Scotland conducts its business and this is demonstrated in the Corporate Plan and People Strategy, as well as being set out in the Equality Mainstreaming Reports, more information about Equality and Diversity can be found on page 48.

Health and Safety

A review of the health and safety policy was begun in 2019-20 and the revised policy finalised in 2020-21 and approved by the Board in October 2020. The new policy brings Health and Safety and Wellbeing closer together and recognising the importance of mental health.

The Health and Safety Annual Report 2020-21 sets out plans for the coming year and reports on risks and mitigations during the reporting year. A refreshed Health, Safety and Wellbeing Committee meets on a quarterly basis to support the delivery of the organisation’s policy and improvement plans, providing oversight and scrutiny of reported information.

The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR) require that certain categories of accidents, occupational diseases and dangerous occurrences must be reported to the Health and Safety Executive (HSE). There were no incidents of any category reported in 2020-21.

Definitions for ‘Occupational Disease’ and ‘Dangerous Occurrence’ can be found on HSE Website.

* We supress all data below 10 to protect staff confidentiality.

Trade Union Representatives

The Trade Union (Facility Time Publication Requirements) Regulations came into force on 1 April 2017. One employee of Revenue Scotland was a relevant trade union official during the period April to July 2019. The time spent on trade union activities represented 5.9% of the employee’s total time during that period at a cost of £1,055. No staff were union representatives in 2020-21.

Civil Service early departure compensation schemes

Redundancy and other departure costs are paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. These are employer costs associated with early departure and are accounted for in full in the year of departure. Where Revenue Scotland has agreed early retirements, the additional costs are met by Revenue Scotland and not the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the undernoted. No members of staff left Revenue Scotland under the scheme in 2020-21 or 2019-20.

Staff costs for Revenue Scotland in the period 2020-21 are set out above. Wages and salaries include gross salaries, performance pay or bonuses received in year (of which there were none), overtime and any other allowance that is subject to UK taxation.

The payment of legitimate expenses is not part of salary. The costs of staff who have been working on the development of the new tax system have been capitalised as part of the cost of the asset.

Staff costs shown above include costs borne by Revenue Scotland on staff seconded to Scottish Government to work on COVID-19 pandemic related posts. These costs total £136,000.

Revenue Scotland employees are civil servants who are entitled to be members of the Civil Servants and Others Pension Scheme or the Principal Civil Service Pension Scheme. These schemes are unfunded, multi-employer defined benefit schemes in which Revenue Scotland is unable to identify its share of the underlying assets and liabilities. The schemes are accounted for as defined contribution schemes under the multiemployer exemption permitted in IAS 19 Employee Benefits. A full actuarial valuation of the PCSPS was carried out as at 31 March 2016. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservicepensionscheme.org.uk).

For 2020-21, Revenue Scotland’s contributions of £717,000 (2019-20: £744,000) were payable to the two schemes at one of four rates in the range 26.6 per cent to 30.3 per cent of pensionable pay, based on salary bands. The scheme actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2020-21 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account or a stakeholder pension with an employer contribution. Employer contributions of £5,000 (2019-20: £6,000) were paid to an appointed stakeholder pension provider. Employer contributions are age-related and range from 3% to 12.5% of pensionable earnings up to 30 September 2015 and from 8% to 14.75% of pensionable earnings from 1 October 2015. Employers also match employee contributions up to 3% of pensionable earnings.

The information included within the remuneration, pension benefits, Civil Service early departure compensation packages, average number of persons employed and staff costs sections above are covered by the audit opinion.

Elaine Lorimer – Chief Executive of Revenue Scotland and Accountable Officer