Board minutes: 19 February 2025

Meeting of the Revenue Scotland Board

19 February 2025

09:00 - 14:00, Victoria Quay, Edinburgh

1. Meeting opening

1.1 The Chair welcomed attendees to the meeting, in particular Alyson Stafford and the three new co-opted committee members.

Apologies

1.2 Apologies were received from Michael Paterson. It was noted with thanks that Brendan Macrae was attending on his behalf.

New Declarations of Interest

1.3 No new declaration of interests were recorded.

2. Guest speaker

2.1 Alyson Stafford thanked the Board for the opportunity to meet with them. She remarked that the Scottish Government continued to operate within a volatile environment and that this would continue to be a theme going forwards. 

2.2 She recorded her thanks to the Board, Chief Executive and the wider Revenue Scotland team for their respective roles in ensuring the continued good governance of the organisation, commenting on how pleased she was to see how Revenue Scotland had continued to thrive and be effective as it approached its first 10 years of operation. She also highlighted Revenue Scotland’s ethos of valuing staff and upholding tax law in Scotland. 

2.3 Alyson welcomed Revenue Scotland’s contribution to joining up the tax system across Scotland, helping to make tax more efficient and effective. She drew the Board’s attention to the SG Tax Strategy published in December 2024, in particular, the areas of research interests and invited Revenue Scotland to review the list and identify whether there were any areas where the organisation might want to get involved. She also encouraged further joint working with local authorities, recognising opportunities for innovation and for improving tax performance. 

2.4 The Board and Alyson welcomed the increase and improvement in collaborative working between SG officials and Revenue Scotland, singling out the Tax Partnership Board as a key recent development.  Attendees discussed opportunities for collaboration across the tax sector, with data and digital capacity identified as useful tool to help drive this agenda.

3. Standing items

Draft Minutes of the 27 November 2024 meeting

3.1 The Board approved the minutes of the 27 November 2024 as drafted.

Draft Minutes of the 5 February 2025 strategy meeting

3.2 The Board discussed the draft minutes of the Board Strategy meeting held on 5 February 2025. Members felt that the minutes did not fully reflect the level of ambition expressed during the session and requested that these were revisited. 

Action and Decision Log

1. The Head of Governance introduced the action log, noting open actions and providing an update where appropriate.
2. It was agreed that actions: A69/23; A70/23; A71/23; A72/23; A09/24; A21/24; A23/24; A24/24; A25/24; A26/24; A27/24; A28/24; A29/24; A30/24; A31/24; A32/24; A33/24; A35/24; A36/24; A37/24; and A38/24 were all to be closed.
3. Board members asked that the description associated with A30/24 was amended to reflect the current position. 

4. Chair's update

4.1 The Chair provided an update on Board recruitment. Candidates had been sifted and the Chair was pleased with the quality and diversity of applicants. Interviews would take place during March. The Board welcomed the approach being taken to the recruitment process and looked forwards to seeing the results. It was proposed that, following the completion of the appointments process, a lessons learned exercise be undertaken to review the costs and benefits of the approach taken.

4.2 The Chair noted that Martin McEwen had chaired his final Audit and Risk Committee (ARC) meeting on the 22 January. He thanked Martin on behalf of the Board for his leadership of the ARC. The Board agreed the proposal that Simon Cunningham should take on the role of ARC Chair.

5. Audit and Risk Committee (ARC) update

5.1 Martin McEwen updated the Board on the ARC meeting that had taken place on the 22 January. ARC had discussed the timetable for the Annual Report and Accounts, requesting that the number of iterations of the draft accounts be kept to a minimum. The Committee had also reviewed the assurance map and risk registers and had no concerns. 

5.2 An update had been received from Internal Audit. The annual audit plan was on track to be completed as planned. The ARC also reviewed the report of the audit of Commercial Contract Management. This had been awarded a Reasonable Assurance rating, with no material concerns having been raised. ARC had agreed the proposed actions in respect of the recommendations made. 

5.3 The Audit Committee had also discussed with Audit Scotland how assurances related to the implementation of the Oracle system would be received and fed through the Annual Reports and Accounts process. 

Review of the Revenue Scotland risk register

5.4 Simon Cunningham presented the results of the review of the Revenue Scotland Corporate Risk Register. He reminded the Board of the role that ARC plays, on behalf of the Board, who are ultimately responsible for ensuring effective risk management within Revenue Scotland, in providing assurance to the Accountable Officer around the risk management approach within the organisation. The review had been undertaken to ensure that the risks continued to align with the Revenue Scotland’s priorities, as set out in the 2024-2027 Corporate Plan. 

5.5 Simon assured the Board that ARC was content with the process being taken, reporting that the risk register was aligned with Scottish Government best practice. He noted that a continuous improvement approach was being taken to ensure the ongoing effectiveness of the processes to understand and manage risk. 

5.6 Members asked about specific areas of focus during the review. Martin and Simon highlighted the re-framing of existing risks to reflect reach and increased ambition of the organisation and the changes made to facilitate a better understanding of planned mitigating actions. 

5.7 The Board welcomed the clearer alignment to the Corporate Plan and noted that risk had historically been well managed within the organisation. Members discussed how the controls in the RS Assurance Map linked to the corporate risk register and the need to ensure that risk and assurance processes were proportionate to the size and needs of the organisation. 

5.8 A concern was raised around the lack of access to data held within SG systems. The Chief Executive agreed that the issue should be considered further. Board members also noted the need for there to be an on-going link between the ARC and the SEC in respect of people risks. 

6. Chief Executive's report

6.1 The Chief Executive provided the Board with an update in respect of her attendance at the recent Public Reform Summit, led by Mr McKee, which had involved around 150 leaders from across the public sector in Scotland. This was a useful event both in understanding the direction of travel in respect of public service reform and as an opportunity to make connections. 

6.2 Reflections were provided on the second meeting of the Tax Partnership Board. This forum was seen to be working well. The meeting had been used to agree a pipeline of legislative change and to consider policy issues related to the Scottish Building Safety Levy. 

6.3 The Chief Executive also informed the Board that the draft Framework Document had been approved by the RS Chair and herself, on behalf of the Board, and was now with Scottish Ministers for approval. 

6.4 The Head of Corporate Functions, the Head of Tax Operations and the Head of People Services had attended a round table discussion on the history of Revenue Scotland held by academics interested in comparative research between Revenue Scotland and the Welsh Revenue authority. The researchers have agreed to provide a draft copy of the report they are producing to Revenue Scotland prior to publication.

Reflections on the Board Strategy meeting

6.5 The Head of Corporate Functions presented reflections from the Senior Leadership Team on the Board Strategy meeting held on 5 February.  He highlighted that the organisation was in a good place, having matured both as a tax authority and as a public body, and that the Board had endorsed the progress that had been made so far. The session had looked at: the fragmented tax landscape within Scotland; the new taxes on the horizon; the need to think tactically about stakeholder engagement that moves tax in Scotland forward; the wider environment, for example the impacts of the Public Service Reform agenda and a proposal for a digital approach to establish a single Scottish Tax system for taxpayers.

6.6 Two options had been reviewed in detail during the session: becoming a more engaged tax authority and looking to move to being a leader across taxes. During the discussion it was clear that there was ambition to move up that scale incrementally. The Head of Corporate Functions outlined three areas of focus to move towards achieving this ambition: 1) Sharpening engagement on new taxes; 2) Developing a clear offer, in particular for local authorities; and 3) Commencing work to develop a proposal for a future Scottish tax system with the Scottish Government and RoS. 

6.7 The Board supported the proposals and underlined the need to scope out a clear position and offering. Members also highlighted the need to focus resources where they could make the biggest impacts, the importance of using data and data analysis, and the need to be clear about terminology, such as ‘tax performance’. 

7. People Survey update

7.1 The Head of People Services updated the Board on the results of the annual People Survey. She emphasised that it was another excellent set of results for the organisation and that challenge would be to maintain them at this level going forwards.

7.2 The Board welcomed the excellent results. Members discussed why there was a relatively low engagement score given the high scores across other related items and the challenge of maintaining these scores as the organisation moves into a period of increased change. The Board asked that the Staffing and Equalities Committee review the results in further detail. 

8. SLCF rate setting

8.1 The Head of Tax Compliance and Professionalism, supported by the Head of Scottish Landfill Tax and the SEPA Scottish Landfill Tax Unit Manager, introduced a paper requesting approval to maintaining the Scottish Landfill Communities Fund (SLCF) subvention fee at 5%. He explained that the fee had been agreed at this level the previous year and that nothing had materially changed since then, with the risk of a deficit arising still live as the ban on bio-degradable municipal waste continues to drive down contributions to the fund.

8.2 The Board was informed that Ministers were considering the future of the fund as its funding declines, with input from both Revenue Scotland and SEPA, and that a public consultation on this subject would run until May 2025. Revenue Scotland and SEPA were also both represented on the working group that would consider the results of this consultation exercise. It was also noted that these considerations would also look at whether a different funding model could be introduced in place of the current tax credit approach.

8.3 Members enquired whether a similar fund had been considered for Scottish Aggregates Tax. The Head of Tax Compliance and Professionalism informed them that it had been considered but for a variety of reasons, not least the current situation facing the SLCF, it had been decided not to do so.

8.4 The Board considered the risks to Revenue Scotland and noted the potential need to seek cover from the Scottish Government through budgetary processes should it appear that income to the fund start might drop below the costs of maintaining it.

9. New devolved taxes report

9.1 The Programme Manager, New Devolved Taxes Programme, introduced the Net Devolved Taxes Report to the Board. He reported that overall it was a positive report. In respect of the Scottish Aggregates Tax (SAT) good progress was being made on the IT build. User testing was underway and due to be completed by the end of February. 

9.2 The Scottish Building Safety Levy was at an earlier stage of development and Revenue Scotland is working closely with the Scottish Government’s Bill team. Early work has started to collect high-level IT requirements and discuss them with the supplier. More detailed work would, however, would have to wait until the final detail of the legislation was known.

9.3 Board members discussed the risks related to the timeline for SBSL, as any delay on the legislative side could impact on the time available to Revenue Scotland to implement the tax. Members also discussed stakeholder engagement noting that, as this was a new tax, there was a different context to that of SAT where an existing UK wide tax was being replaced with a Scotland specific one. The Board was informed that a stakeholder engagement strategy was being developed, with the key stakeholders being building firms, trade bodies and organisations such as the Chartered Institute of Taxation (CIoT). There was also an expert advisory group in place for SBSL and that this was being used to assist in building networks. 

10. Q3 performance report

10.1 The Board considered the Q3 performance report. The Chair welcomed the continued improvement in the quality of the report.

10.2 Members discussed again the concerns about the potential risk to the viability of some landfill operators. The Chief Executive confirmed that Revenue Scotland’s role would be to keep SG Officials appraised of any trends it identified in respect of this. The Board also acknowledged that there may be a need to consider any implications of this in respect of financial reporting through the Annual Report and Accounts. It was agreed that, should this be required, guidance would be sought from Audit Scotland.

10.3 The Board also discussed the figures on pursuable debt, the progress of the engagement strategy and the progress in respect of the Digital and Data programme. In respect of the Digital and Data programme the Head of Corporate Functions advised that, whilst the Q3 report was showing this at an ‘amber’ rating, good progress had since been made across a number of workstreams and he would now assess it as being more ‘amber/green’. Members asked for a further update on the progress of the Digital and Data Programme at an appropriate point.

10.4 Members asked about whether or not they should record themselves as attending relevant events on behalf of Revenue Scotland, in support of the organisation’s engagement strategy. The Chair confirmed that his view was that Board members were empowered to take a judgement about whether or not this was appropriate. It was agreed to amend the minutes of the last Board meeting to make that clear. 

11. AOB

11.1 No items of AoB were raised.

11.2 The Chair confirmed that the next Board meeting would be held on 14 May 2025.  

End of Meeting 

19 February 2025