Corporate Governance Report

The Directors’ Report

Revenue Scotland Board 2023-24

In line with paragraph 1 of Schedule 1 of 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. This is subject to evidence of effective performance and their continued possession of the skills, knowledge, and experience required for 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.

Board Members 2023-24

Aidan O'Carroll - Chair

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, as well as a Global Tax leader, Aidan has advised many local and global companies across a wide spectrum of tax and business issues around the world. He has considerable experience in dealing with Regulatory matters and is a Chartered Accountant (ICAS) as well as being a Chartered Director (IoD). Aidan holds a number of Non-Executive Director roles in organisations based in the UK.

Martin McEwen - Chair of the Audit and Risk Committee and Deputy Chair of the Revenue Scotland Board

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.

Jean Lindsay - Chair of the Staffing and Equalities Committee

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) and has experience in leadership, strategic people management, health and safety, change management and corporate governance in the public sector. She is also a member of the Board of Crown Estate Scotland and a non-legal member of the Employment Tribunal (Scotland).

Robert MacIntosh - Member of the Audit and Risk Committee

Robert MacIntosh is Professor of Strategic Management and Pro Vice Chancellor for Business and Law at Northumbria University. He has a PhD in Engineering and his work focuses on strategy and change with senior leadership teams. He has worked with over 100 organisations and has significant experience as a chair and trustee. He is a Fellow of the Institution for Engineering and Technology, the Academy of Social Sciences and the British Academy of Management. He is currently the chair of the Chartered Association of Business Schools and was formerly the chair of the social care charity Turning Point Scotland.

Rt Hon Ken Macintosh - Member of the Staffing and Equality Committee

Ken Macintosh was the Presiding Officer of the Scottish Parliament until stepping down from elected politics in 2021. He began his working life with the BBC, serving as a senior producer and broadcast journalist on a range of news and current affairs programmes. He was elected to the first Scottish Parliament in 1999 and held a number of front bench roles before being chosen as Speaker in 2016. Ken is a member of the Privy Council as well as a Trustee of several charities.

Idong Usoro - Deputy Chair of Staffing and Equalities Committee

Idong Usoro joined as a Board Member on 1 June 2022 and is an experienced CIO, CTO and business transformation leader. Idong was appointed as Deputy Chair on the Staffing and Equalities Committee on 11 August 2022. 

Idong has qualifications in business and computer science. His work focuses on driving corporate and digital transformations with boards, and technology teams in private, public and third sectors, globally. Idong’ s experience includes having worked with over 100 organisations as a senior technology and data specialist across sectors. 

Idong is the Head of Enterprise Architecture at Castle Water Limited with responsibility for driving maturity in data and AI technology strategy, information and security governance and the architecture practice in preparation for their next stage of growth. 

Other recent board experience includes serving on the Abbeyfield England board and an appointment in 2024 to the board of the National Examination Board in Occupational Safety and Health (NEBOSH) as a Non-Executive Director.

Simon Cunningham - Deputy Chair of the Audit and Risk Committee

Simon Cunningham joined as a full Board Member on 1 January 2021 having previously served on the Audit and Risk Committee from 2019. He was appointed Deputy Chair of the Committee on 4 June 2023. Simon qualified as a Chartered Accountant in 1988 and was a partner in Scott-Moncrieff for many years, leading the firm’s outsourced internal audit and risk consulting services. 

During his time at Scott-Moncrieff, he worked with the boards and audit committees for a wide range of public sector organisations. After four years as Chief Internal Auditor at AEGON UK plc, he joined McInroy & Wood (personal investment managers) as their Director of Compliance and Group Risk, and chaired their Risk Committee for six years. 

He chairs the Board of the Free Church of Scotland Pension Trustees Limited and the Free Church of Scotland’s Investment Committee. In November 2023, Simon was appointed to the Board of Ferguson Marine (Port Glasgow) Ltd to Chair their Audit & Risk Committee.

Senior Leadership Team 2023-24

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 25 years’ leadership experience, working at senior management and board level in the UK Civil Service in a diverse range of organisations covering regulation and operational delivery. She joined Revenue Scotland from the Law Commission of England and Wales, where she was Chief Executive. Prior to that, Elaine worked as a senior legal adviser in local government in Scotland, latterly focusing on regional transport including the privatisation of the railways and introducing alternative funding models to major investments in infrastructure. 

Michael Paterson – Head of Tax 

Michael Paterson joined Revenue Scotland in March 2019 and has lead responsibility for administration and compliance for the devolved taxes, ensuring they are collected and administered efficiently and effectively. He also has the Senior Responsible Officer role for the Devolved Taxes Programme. Michael has extensive knowledge and operational experience of UK taxes, particularly those dealing with international matters, resulting from 30 years as a tax professional with HMRC. His wide-ranging and senior tax leadership roles have covered technical, policy, and investigation work. 

Neil Ferguson – Head of Corporate Functions 

Neil Ferguson has worked on devolved taxes since 2012 and been with Revenue Scotland since 2016. He has responsibility for seven teams: People Services, Governance, Statistics and Management Information, Strategy and Communications, Tax Development, Finance, and Information Technology. Prior to his current post, he worked on the Additional Dwelling Supplement, led the Air Departure Tax programme and the development of corporate plans. With the Scottish Government, he was Bill Team Leader for the Land and Buildings Transaction Tax (Scotland) Bill and other areas of devolved tax legislation. He also worked on the Referendum Bill and the introduction of the Home Report, which transformed the approach to the buying and selling of homes in Scotland. 

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 has 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.

Statement of the Accountable Officer’s responsibilities

Under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000, Scottish Ministers have directed Revenue Scotland to prepare for each financial year a statement of accounts in the form and on 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 income and expenditure, Statement of Financial Position and cash flows for the financial year. 

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

• observe the Accounts Direction issued by Scottish Ministers, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis  
• make judgements and estimates on a reasonable basis 
• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the financial statements 
• prepare the financial statements on a going concern basis 
• confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable. The Accountable Officer takes personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.

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

The responsibilities of an Accountable Officer, including responsibility for the propriety and regularity of the public finances for which they are answerable, for keeping proper records and for safeguarding the Revenue Scotland’s assets, are set out in the Scottish Public Finance 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 they consider is inconsistent with their duties on financial, regulatory or propriety grounds, and specifically where they seek 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.

As the Accountable Officer, 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 I 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. In this role, I seek assurance that appropriate controls are in place across the organisation, and in respect of the partners whom we rely on to support us in delivering our objectives. I can confirm that these have been in operation during 2023-24 and to the date of signing these accounts.

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 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, corporate performance, tax compliance, staff, health, safety and wellbeing, changes in the devolved taxes, progress on the introduction of new taxes 
• scrutiny of the Annual Reports and Accounts 
• reports from the Audit and Risk and Staffing and Equalities Committees
• strategic engagement with key partners and service users.

I can report that during 2023-24 the Board met on six occasions. This included a joint formal Board meeting and strategy session (2022-23: seven). During this time our Board scrutinised and considered a number of specific matters including:

• Revenue Scotland’s new Corporate Plan 2024-27 
• the move from the hybrid pilot to hybrid working formally becoming Revenue Scotland’s ongoing operating model 
• recommendations to improve compliance rates for Three-Yearly Reviews of Non-Residential Leases and proposals to reduce the backlog of lease review penalties 
• approval of the business case and the programme of activity required to implement Scottish Aggregates Tax 
• development of the new Data and Digital Strategy 
• revisions to governance documents, including the Financial Framework, Whistleblowing Policy and Risk.

Audit and Risk Committee

The Audit and Risk Committee (ARC) supports the Board and Accountable Officer through reviewing the comprehensiveness, reliability and integrity of the assurances produced in support of the financial statements. The terms of reference of the committee are published on Revenue Scotland’s website within the Board’s 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, and 
• overseeing the financial reporting process.

Members of the committee during 2023- 24 were Martin McEwen (Chair), Simon Cunningham (Deputy Chair) and Robert MacIntosh.

The committee is also attended by the Chief Executive, Head of Corporate Functions, Head of Legal Services, Head of Tax, Head of Governance, the Head of Finance and representatives of internal and external audit as well as other staff as required.

I can report that during 2023-24 the committee met six times; this included a joint quarterly committee meeting and strategy session on risk management (2022- 23: seven). The committee engaged in a number of relevant matters including:

• consideration of reports from Internal Audit 
• a strategy session to review Revenue Scotland’s corporate risk register, with a focus on risk appetite 
• consideration cyber security assurances 
• consideration of assurances around the introduction of new corporate IT systems for HR and Finance.

The committee reviewed its effectiveness during 2023-34, using the checklist set out in the Scottish Government’s Audit Committee Handbook, in early 2024-25. It found no issues of concern which could affect its normal function.

Staffing and Equalities Committee

The Staffing and Equalities Committee (SEC) advises and provides assurance to our Board and Accountable Officer on issues relating to: people; equality, diversity and inclusion; and health, safety and wellbeing.

During 2022-23, our Board reviewed the operation of the committee and agreed to pilot changes during 2023-24 aimed at ensuring a more strategic focus for the committee. Following their review, the committee is in agreement that the new format has been a success, allowing for more strategic and focused discussions.

The new format will continue to be used and be reviewed periodically to ensure that it continues to meet the needs of SEC and the Board.

The terms of reference for the committee are published on Revenue Scotland’s website within the Board’s Standing Orders. The committee reviewed its effectiveness during 2022-23 and found no issues of concern which could affect its normal function.

Members of the committee during 2023–24 were Jean Lindsay (Chair), Idong Usoro (Deputy Chair) and Ken Macintosh. Staff attendees comprise the Chief Executive, Head of Corporate Functions, Head of Legal Services, Head of Tax, Head of People Services and Head of Governance. Further staff members attend as required.

I can report that during 2023-24, the committee met three times (2022-23: three) and engaged in a number of relevant matters including supporting the development and scrutiny of:

• the People Strategy and action plan 
• staff survey  
• workforce planning 
• health, safety and wellbeing 
• equality, diversity and inclusion.

Assurances provided to the Chief Executive

I have received written assurances from my Heads of Service, who have responsibility for the operation and effectiveness of internal controls within Revenue Scotland’s Tax, Legal and Corporate Functions teams. I am pleased to report that no significant matters were raised with me. 

The Accountable Officer of the Scottish Environment Protection Agency (SEPA) has provided me with assurance in respect of the statutory functions delegated to them by Revenue Scotland. No significant issues were raised with me by SEPA. 

I also receive copies of the certificates of assurance provided to the Scottish Government’s Director General Corporate, produced to support the assurances she provides to the Principal Accountable Officer in respect of the Scottish Government’s digital, financial and people services. These are shared with me as some aspects of these are relevant to the services we receive from the Scottish Government as a shared service. No significant issues were raised within these.

One issue of particular interest to Revenue Scotland raised within the SG certificates relates to the implementation of the new HR and Finance systems. I am very aware of the challenging nature of this substantial change programme and also the significant benefits that this investment in digital services will bring to both the Scottish Government and a number of delivery bodies including Revenue Scotland. Given the significant operational impacts for our organisation should the programme fail to deliver the intended benefits, I continue to engage closely with the Scottish Government to ensure that I receive the assurance I require as Accountable Officer that the programme will be delivered effectively and that the systems will meet Revenue Scotland’s needs. 

In conclusion, I can confirm that, based on the aforementioned written assurances received, there were no 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, our own information policies and best practice. 

We have an Information Assurance Governance structure which prioritises and manages information risks. 

The governance structure:

• protects the organisation, its staff and our service users from information risks where the likelihood of occurrence and the consequences are significant; 
• ensures adherence with statutory duties; and 
• 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.

In support of the SIRO, an Information Governance Group (IGG) has also been established whose role is to steer Revenue Scotland’s approach to information governance, review issues arising with regards to data protection, carry out horizon scanning in relation to new legislative and other developments relating to information governance and above all, to ensure that we comply with all of our mandatory legal obligations.

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

During the course of the year, there were two issues relating to minor data losses, which were reported and dealt with internally. The losses were resolved quickly and mitigations put in place. None of the losses met the threshold of being reportable to the Information Commissioner’s Office. There were no security incidents involving any physical losses such as paper files or laptops.

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. 

During 2023-24 Revenue Scotland attended Parliament on three occasions providing evidence on: the Aggregates Tax and Devolved Taxes Administration (Scotland) Bill; the Scottish Government’s Public Services Reform Programme and Revenue Scotland’s performance during 2022-23.

Revenue Scotland’s Corporate Plan, supporting legislation and this Annual Report are published documents. The Corporate Plan 2021-24, on which this document reports, was approved by Scottish Ministers and laid before the Scottish Parliament in November 2021 and this report will be laid before Parliament in October 2024. 

A new Corporate Plan covering was laid before the Scottish Parliament on the 28 March 2024 and will direct the organisation’s activities during the period 2024-27. Corporate plans, all annual reports and accounts and minutes of Revenue Scotland Board meetings are available on our website.

Internal Audit 

The Scottish Government’s Directorate for Internal Audit and Assurance (DIAA) provide Revenue Scotland’s internal audit service.

DIAA produce an annual audit plan which is reviewed by the Audit and Risk Committee, who provide advice on the plan to the Board and the Accountable Officer. Regular updates on progress against the audit plan are presented by DIAA to the Audit and Risk Committee’s meetings. 

The Memorandum of Understanding between Revenue Scotland and DIAA was also reviewed during the year, reconfirming the basis for this service going forwards.

During the year, DIAA completed audits on the following:

• Knowledge management within the Legal Team: this review looked at knowledge management within the Legal Services Team and how it can contribute to the quality of advice provided and/or the efficiency of the process. A ‘substantial’ assurance rating was awarded. The report noted a solid foundation for storing information together with a very strong culture and ‘tone from the top’ around knowledge management. It highlighted areas of good practice around availability of expertise and experience together with strong relationships with client teams, which all contribute to the quality of knowledge sharing already in place. The report concluded that the team is very well placed to build on what has been achieved already with the positive culture and quality of resource and support and noted the opportunity for other teams to consider the results of the review for application in their own areas and to help embed the enhancement opportunities across the organisation.
• Lease Review Returns: this review commenced during 2023-24 and was completed during early 2024-25. It examined the effectiveness of the series of actions taken to improve lease review return submissions and the outcomes achieved. A ‘reasonable’ assurance rating was provided. The report: concluded that progress was being made and that a large amount of work and analysis had been undertaken to date; noted the complexity of the issues involved and recommended a more strategic approach should be adopted to achieve improvement in lease review return compliance and to support the case for change in areas required.
• Revenue Scotland’s approach to Assurance Mapping: this advisory review provided assurance on our approach to Assurance Mapping and the changes that had been made to the corporate assurance map. A ‘substantial’ assurance rating was awarded. The report concluded that the approach built on the positive culture around internal control and continuous improvement, using the assurance map as a tool to evidence management’s ongoing assurance conversations. It supported the approach that had been undertaken, which was seen to reflect good practice and followed recommended practise in identifying assurance provided across the four lines of defence helping ensure completeness of sources of assurance considered.
• Approach to hybrid working: this review, deferred from 2022-23 to take into account other work in this area, considered Revenue Scotland’s approach to considering and adopting hybrid working. A ‘substantial’ assurance rating was awarded. The report supported the approach to the consideration and piloting of hybrid working. It also endorsed the proposed next steps in moving out of the pilot stage and into the adoption of hybrid working as the organisations operation model. The report stated that the approach taken, involving consideration of optimal operating model, gathering data on agreed evaluation criteria, employee feedback and consideration of wider trends to be good practice.

In addition, a follow-up review was conducted in respect of the 2022-23 Review of Litigation Decisions. This review considered Revenue Scotland’s processes and governance around taking and responding to complex litigation decisions.

The review was completed, noting that all recommendations had been fully implemented and good progress made to enhance overall governance over litigation decisions. 

The overall annual assurance opinion for the year was ‘Substantial Assurance’. This is the fourth year running that Revenue Scotland has received this rating and reflects the fact that DIAA continues to view Revenue Scotland’s risk, governance and control procedures as effective in supporting the delivery of its objectives and that any exposure to potential weakness is low and the materiality of any consequent risks negligible. 

DIAA reported that their work continues to obtain evidence of a strong culture and tone from the top regarding maintenance of robust control over key processes and embedding effective governance. They noted the focus on continuous improvement at all levels, helping to drive process improvement and efficiency, including improvements to enable taxpayers to comply with their obligations.

The report commented that Revenue Scotland is now well established in its role as the Tax Authority responsible for the collection and management of Scotland’s devolved taxes, commending the strong commitment to operational excellence and robust systems; which were clearly evidenced as part of stated strategic outcomes and priorities for further improvement and change beyond what is currently in place.

External Audit 

External Audit is provided by Audit Scotland. The Audit Director is appointed under the Public Finance and Accountability (Scotland) Act 2000 to carry out the external audit of Revenue Scotland and the devolved taxes. 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 90.

As part of the 2022-23 audit undertaken by Audit Scotland, three matters were highlighted for attention, namely:

• the risk that the related party disclosure may be incomplete or inaccurate  
• the risk that internal controls do not operate effectively, and 
• the risk key IT system and service providers may not have appropriate IT business continuity and disaster recovery plans.

These matters were addressed by management and actions put in place to mitigate the risks. 

Audit Scotland has reviewed these matters during their audit of 2023-24 and reported its conclusions in its Annual Audit Report 2023-24.

Assessment of corporate governance 

Revenue Scotland has in place a system of internal controls and policies which are designed to safeguard its assets, data and ensure the reliability of financial records in relation to operational and tax duties. 

I continue to ensure that these controls are subject to review by management on a regular basis, and the new assurance mapping process, developed and implemented last financial year, has helped facilitate and enhance these regular reviews and alignment with Corporate Risks. 

Our internal controls also undergo formal review by both Internal and External Audit, whose reports are made available to the Audit and Risk Committee. Having assessed our corporate governance arrangements, I confirm that they comply with generally accepted best practice principles and relevant guidance.

Risk management 

I have assessed our risk management arrangements and confirm that they are in accordance with the guidance set out in the Scottish Public Finance Manual. The year-end Certificates of Assurance include a dedicated section assessing the effectiveness of Revenue Scotland’s risk management approach over the year and no significant control matters were raised. This, alongside the assessment of risk throughout the year, contributes to my overall confidence assessment offered; further confirming that robust arrangements and practices were in operation throughout 2023-24.

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 and, where relevant, promote 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 
• the 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 in the UK Government website.

The remuneration of non-senior civil servants within Revenue Scotland is set in accordance with Scottish Government Public Sector Pay Policy 2023-24 as part of the Scottish Government Main Bargaining Unit. 

Revenue Scotland’s Board 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 and increased annually in line with the Scottish Government Public Sector Pay Policy. Expenses incurred in carrying out these duties are also reimbursed.

Remuneration and Staff Report

Fees of Board members and salaries of the Senior Leadership Team are shown below:

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

The reported remuneration for Ken Macintosh, Robert MacIntosh and Idong Usoro represents their total remuneration since the inclusion of their roles on the Board in June 2022. 

The maximum banded annual fees that could be claimed under the letters of appointment are: Chair £15,000-20,000 and Board members £10,000-15,000.

* Accrued pension benefits for the Senior Leadership Team are not included in this table for 2023/24 due to an exceptional delay in the calculation of these figures following the application of the public service pensions remedy. 

None of the above received any benefits in kind or bonus payments in the years 2023-24 or 2022-23. 

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.

Fair pay disclosure 

Reporting bodies are required to disclose the percentage increase in pay from the previous financial year for the highest-paid director in their organisation and the average percentage increase for all employees of the organisation. In 2023-24 the mid-point of the band of the highest-paid member of the Senior Leadership Team increased by 4.65% from 2022-23. The average increase for all other employees was 10%. Actual grade pay increases varied from 4% to 17%.

Reporting bodies are also required to disclose pay-ratio information for the highest-paid director and median and quartile employee pay.

No employee received remuneration in excess of the highest-paid member of the Senior Leadership Team. Remuneration ranged from £23,735 to £111,741 (2022-23: £19,000 to £107,000).

Pension benefits

* Accrued pension benefits for the Senior Leadership Team are not included in this table for 2023-24 due to an exceptional delay in the calculation of these figures following the application of the public service pensions remedy. 

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. Pension data is 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: three 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. The Government removed discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members. As a result, eligible members with relevant service between 1 April 2015 and 31 March 2022 may have been entitled to different pension benefits in relation to that period.

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 is 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 8.0% 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 3.0% 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 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.

(The pension figures for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure 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 whole-time equivalent people employed during the year was as follows:

The staff numbers shown above for 2022-23 include 1 FTE for a member of staff who was seconded to Scottish Government and whose staff costs are 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.

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. It is influenced by both the pay levels for equivalent jobs and the distribution of men and women across the grades within the permanent workforce.

Provisional Data for 2023 published by the ONS reports the gender pay gap for Scotland as 6.5% and 13.2% for the UK.⁴ This is the mean figure which is the standard figure used by the Office of National Statistics (ONS) to calculate the pay gap.

The median gender pay gap for all staff at Revenue Scotland at the end of March 2024 is 0%, and the mean gender pay gap is 1.6% (2023: 3.1% ). The movement arises from changes in the gender mix of staff at March in each financial year as represented in the table above, as well as changes in grades of those staff.

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. A pay gap can arise if 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 composition. It should be noted that the pay gap is calculated at a point in time and can move significantly from month to month.

Sickness absence

We recognise 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 aim to:

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

In 2023-24 an average of 8.6 working days per employee were lost (2022-23: 11.5 days).

Staff

Staff churn, which includes staff leaving Revenue Scotland for positions within the wider Scottish Administration, was 13% in 2023-24 (2022-23: 9.8%). Staff turnover, defined as excluding staff moving to other Scottish Administration bodes, was 7% in 2023-24 (2022-23: 2.5%).

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 41 under KPI 6.

Employees with disabilities

We comply with the Scottish Government’s Civil Service Code of Practice on the employment of people with disabilities. The code aims to ensure 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 we conduct our 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 on Equality and Diversity can be found on page 46.

Health, safety and wellbeing

Health and safety

Health and safety is a key priority for Revenue Scotland and we are committed to ensuring that all employees are trained and aware of their responsibilities. Over the past year, we have implemented a range of initiatives to promote health and safety awareness and ensure training compliance.

Our dedicated Health, Safety, and Wellbeing Committee has continued to play a pivotal role in maintaining and enhancing our safety controls. Throughout the 2023-24 period the team met regularly to review safety actions and discuss feedback from across the organisation. These meetings have been crucial in fostering a culture of continuous improvement and ensuring that all safety measures are effectively implemented and updated in response to both internal and external feedback.

Our Health and Safety Annual Report for 2023-24 outlines our strategic approach for the coming year. This report details our plans to sustain and enhance our safety protocols. It focuses on both pre-emptive measures and responsive strategies to address any emergent issues. It serves as a roadmap guiding our efforts to ensure the health and safety of all our employees and stakeholders and reinforcing our commitment to upholding high standards of workplace safety.

This year, we have significantly bolstered our approach to accessing competent health and safety advice. Recognising the unique challenges presented by our operations, which include routine organisational activities and specific tasks like landfill site visits, we have secured specialist knowledge that is crucial for these environments.

We have agreed a Memorandum of Understanding (MoU) with SEPA, through which SEPA provides us with competent advice in respect of landfill site visits. This allows us to benefit from their extensive expertise in conducting site visits across a variety of settings. This is valuable in ensuring high standards of health and safety in these environments.

In addition, we have also engaged a Competent Person service allowing us to take advantage of specialised expertise and an independent perspective to our risk management practices. This complements the advice we receive from SEPA and will ensure, as we take on new responsibilities, including Scottish Aggregates Tax, that we fully recognise the accompanying health and safety implications. We are focused on being proactive in addressing these concerns to ensure that we are prepared ahead of implementation. Our approach includes careful assessment of potential risks. We have already begun a user journey exercise to understand the unique hazards and how best to mitigate these. This will be a focus for 2024-25.

This enhanced capability enables us to tailor our health and safety strategies effectively ensuring that expert advice is available where and when it is most needed. An early priority has been the review of our Health and Safety Policy, which will be completed during 2024-25.

Health, safety and wellbeing dashboard reports are discussed at each SEC meeting. This adds an additional layer of assurance, ensuring we are meeting our health and safety obligations. SEC also conducts an annual deep dive into our health, safety and wellbeing arrangements to ensure that our health and safety management is appropriate. Additionally, a Health and Safety update has been added as a standing agenda item for every performance meeting of the Board.

As well as the mandatory health and safety training provided to all of our staff, several of our senior managers and Board members have completed the NEBOSH course on Health and Safety Leadership Excellence during the year. All of our Board members have now competed this training, which equips individuals with the knowledge and skills necessary to lead and support the delivery of a culture of health and safety throughout the organisation.

We also supported our staff during the year through the introduction of an Unacceptable Behaviour Policy, which ensures a safe working environment for all of our staff. This policy defines Unacceptable Behaviour, sets out the behaviour expected of tax payers, external organisations and other stakeholderswhen dealing with Revenue Scotland and the action that will be taken whenever unacceptable behaviour is encountered.

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 of these categories reported in 2022-23 or 2023-24.

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

Wellbeing 

Revenue Scotland prioritises the promotion of staff wellbeing. This helps us to create a positive and supportive workplace culture that fosters creativity, innovation, and collaboration. We are committed to continually reviewing and updating our staff wellbeing initiatives to ensure that we are providing the best possible support to our staff.

Our staff-led health and wellbeing group delivered a variety of health and wellbeing initiatives. These included awareness sessions on suicide, breast cancer, know your numbers and sleep hygiene. Our staff are encouraged to participate in volunteering days and in December some staff spent the day supporting Empty Kitchen Full Hearts in Edinburgh, which provides meals to those in need.

The civil service people survey reports 87% of Revenue Scotland respondents feel Revenue Scotland provides good support for their health, wellbeing and resilience.

Trade Union representatives 

The Trade Union (Facility Time Publication Requirements) Regulations came into force on 1 April 2017. No employees were trade union representatives in 2023-24. One member of staff was a relevant trade union representative during the period December 2022 to March 2023.

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 2023-24 or 2022-23.

Staff costs

Staff costs for Revenue Scotland in the period 2023-24 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 Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS) – known as ‘alpha’ – are unfunded multi-employer defined benefit schemes. However Revenue Scotland is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the PCSPS as at 31 March 2016. The schemes are accounted for as defined contribution schemes under the multi-employer exemption permitted under IAS19 employee benefits. You can find details in the resource accounts of the Cabinet Office: Civil Superannuation.

For 2023-24, employers’ contributions of £1,151,000 were payable to the PCSPS (2022-23: £941,000) at one of four rates in the range 26.6% to 30.3% of pensionable earnings, based on salary bands.

The Scheme Actuary reviews employer contributions usually every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2023-24 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, which is a stakeholder pension with an employer contribution.

Employers’ contributions of £nil (2022- 23: £nil) were paid to one or more of the panel of three appointed stakeholder pension providers. Employer contributions are age-related and range from 8% to 14.75%. Employers also match employee contributions up to 3% of pensionable earnings.

The information included within the remuneration, fair pay, 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

24 September 2024