Performance Report

Performance Report

Introduction 

This performance overview serves as a summary to provide readers with a clear and comprehensive understanding of Revenue Scotland, our purpose, and our performance over the reporting period. This section summarises our strategic outcomes, our performance in relation to these outcomes, and the management of key risks.

The performance overview begins by detailing our key functions, our governance structure, before discussing our progress against the strategic outcomes outlined in our Corporate Plan 2021-24

Who we are and what we do 

Revenue Scotland was established under the Revenue Scotland and Tax Powers Act 2014 (RSTPA). We are responsible for the collection and management of the fully devolved Scottish taxes: Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT). 

As a Non-Ministerial Office, we are part of the Scottish Administration and we are accountable directly to the Scottish Parliament, ensuring the impartial and fair administration of taxes. The Scottish Government is responsible for tax policy and rates, while we provide policy development support through the provision of advice, data, and information based on our operational experience. 

We are proud to work alongside the Scottish Fiscal Commission (SFC), which is responsible for providing independent forecasts of tax revenue in line with the Fiscal Framework. To aid forecasting work, we provide anonymous, aggregated SLfT and LBTT data to the SFC. 

In addition to delegating specific functions for SLfT collection to the Scottish Environment Protection Agency (SEPA), we also collaborate with His Majesty’s Revenue and Customs (HMRC) for compliance activity. Furthermore, we actively participate in the British Isles Tax Authorities Forum, working closely with other tax authorities to share knowledge and best practices in tax collection and management.

How we are governed 

The Board is responsible for the strategic direction, oversight, and governance of the organisation. It currently comprises seven members appointed by Scottish Ministers through the Scottish Public Appointments process. Board members provide specialist knowledge in key areas and act as ambassadors for the organisation. 

The Board has two committees: the Audit and Risk Committee (ARC) and the Staffing and Equalities Committee (SEC), which provide direction, support and detailed scrutiny of key areas of work and report on these to the Board. The Chief Executive is accountable to the Board and acts in a personal capacity as the Accountable Officer for Revenue Scotland. The Chief Executive is responsible for the day-to-day leadership and operation of the organisation. 

Further details about the activities of the Board, committees, and staff can be found in the Accountability Report section of the Annual Report.

How we are structured 

Our Senior Leadership Team is led by the Chief Executive and includes the Head of Tax, the Head of Corporate Functions, and the Head of Legal Services. Reporting directly to the Chief Executive, our SLT are responsible for the operational leadership, and the direction and coordinating of the delivery of our strategic outcomes. 

Our organisational and team structure is depicted in the diagram on the following page, providing a visual representation of the Senior Leadership Team’s role within our organisation.

How we are funded 

Revenue Scotland is part of the Scottish Administration and our budget is set by the annual Budget Bill. The Scottish Government liaises with us to identify our budgetary requirements which are then reflected in the Budget Bill that Ministers present to the Scottish Parliament. Where additional funding for major programmes is required, proposals for funding are developed in line with the guidance on business cases in HM Treasury’s ‘The Green Book: appraisal and evaluation in central government’. 

We are responsible for managing our budget for each financial year to deliver our statutory functions. We have authority to incur expenditure on individual items, but this is subject to the limits imposed by the budget allocated by the Scottish Parliament and guidance from Scottish Ministers.

Revenue Scotland’s purpose and vision 

This year, 2023-24, was the final year in our current Corporate Plan – delivered from April 2021 until March 2024. The Corporate Plan 2021-24 outlined our purpose, vision, strategic outcomes and performance measures. These determined our priorities in raising revenue to support public services across Scotland in the most efficient and effective way.

Purpose 

To efficiently and effectively collect and manage the devolved taxes which fund public services for the benefit of the people of Scotland. 

Vision 

We are a trusted and valued partner in the delivery of revenue services, informed by our data, digital by design, with a high-performing and engaged workforce.

Corporate Plan 2021-24 strategic outcomes 

After nine successful years in operation, and collecting over £6 billion in tax revenue, we have continued to build our reputation as a leading and well-respected public body, delivering excellence for Scotland. 

This year marked the final stretch of our Corporate Plan for 2021-24, which focused on four strategic outcomes, as outlined below. These outcomes were the cornerstone of our efforts towards achieving our ambitions, ensuring we continued to progress and improve the services we offered. Our new Corporate Plan 2024-27 was laid in Parliament in March 2024, and includes a refreshed purpose, vision and new strategic outcomes.

Excelling in Delivery 

We offer user-focused services that are digital by design, and provide value for money, convenience and ease of use for internal and external users.

Investing in our People 

We are high-performing, outward-looking and diverse, and provide a great place to work as an employer of choice. Our staff are motivated and engaged, and we invest in their development and health, safety and wellbeing.

Reaching Out 

We are accessible, collaborative and transparent, keen to learn from others and to share our experiences and expertise.

Looking Ahead 

We plan and deliver change and new responsibilities flexibly, on time and within budget. We have a digital mindset, maximising the use of our data and harnessing new technology to improve our working practices and services.

How we deliver our purpose and measure our success 

Our purpose is delivered through the strategic outcomes in our Corporate Plan, with progress tracked using key performance indicators (KPIs) and milestones related to key project objectives. Our Business Plan details projects and initiatives supporting these outcomes, guiding team and individual goals. 

This structure ensures a direct connection between individual work goals and the strategic outcomes defined in the Corporate Plan. Our systematic method of managing performance underpins our ability to track and document progress throughout the organisation.

National Performance Framework 

The National Performance Framework (NPF) underpins the Scottish Government’s vision, setting out National Outcomes to measure progress towards its goals. Our Corporate Plan is aligned with these Outcomes, guiding our efforts to support those relevant to Revenue Scotland’s remit. 

Our Corporate Plan’s execution involves clearly defined objectives and deliverables, enacted through a detailed strategy that includes corporate, business, and team plans. We track our progress rigorously, with monthly and quarterly performance reviews. 

By collecting devolved taxes, we indirectly support all National Outcomes, and directly contribute to six specific areas: economy, environment, fair work and business, communities, human rights, and health. Our approach emphasises investment in our workforce, dedication to equality, diversity, and inclusion, and collaboration with various partners, all underpinned by transparency and accountability.

The following table shows which Revenue Scotland strategic outcomes are relevant to the various National Outcomes.

Key issues and risks

This corporate risk summary provides an overview of the key risks faced, their impact on delivering our strategic outcomes, and emerging risks that may affect future performance.

We have a Risk Management Framework that follows the best practices outlined in the Scottish Public Finance Manual (SPFM) and the Scottish Government’s Risk Management Guidance. This framework guides us in identifying, documenting, and scoring risks, assigning ownership, determining responses, and monitoring and reporting progress. We completed a review of this framework in 2023-24 to ensure it remains effective.

Managing and communicating potential threats and opportunities is key for meeting the goals in our Corporate Plan. Before taking any action, we thoroughly score and manage risks. The concept of ‘risk appetite’ — the level of risk we are willing to accept to achieve our objectives — helps create a shared understanding across Revenue Scotland and supports confident, risk-based decision-making. 

Throughout the year, the Audit and Risk Committee, together with staff and Board members, reviewed the corporate risk register with a focus on risk appetite. Looking ahead to our new Corporate Plan for 2024-27, we plan to conduct a full review of our corporate risks.

Performance summary 

Key projects 

Our Business Plan outlines key strategic projects for 2023-24, marking the final year of the Corporate Plan. These projects represent major investments or hold strategic importance, playing a crucial role in fulfilling the Corporate Plan’s objectives. As we conclude this period, the majority of our projects are either on schedule or have been successfully completed.

KPIs overview 

The Corporate Plan 2021-24 outlines our key performance indicators (KPIs) that track our progress and alignment with our goals. These KPIs are detailed in the Performance Analysis section of this Annual Report, with page references included for easy navigation. 

These KPIs reflect our operational effectiveness and adaptability to changes within the organisation, while broadening the scope of our performance assessment, to include areas such as equality integration and service user feedback.

Financial performance 

Resource accounts 

The figures given below are the final budget (revenue and capital) after adjustment in the Spring Budget review.

In 2023-24 revenue expenditure was £40,000 (0.5%) less than budget, and capital expenditure was on budget.

Devolved Taxes

The values for the tables on the previous page, page 24, are for tax returns and amendments submitted during 2023-24. They are adjusted for the value of LBTT and SLfT returns received during April and May 2024, which relate to the period up to March 2024. 

The tax returns submitted during 2023- 24 may include adjustments to returns originally submitted in previous financial years. 

However, unless these adjustments were received in April or May of the relevant financial period and therefore accrued into the financial statements of that year, these are accounted for in the year of receipt. 

The LBTT revenue raised is dependent on performance of both the residential and non-residential property markets within Scotland. The SLfT revenue raised is dependent upon categories and tonnage of waste deposited in landfill sites within Scotland. 

Independent forecasts of LBTT and SLfT revenue are published by the SFC. The SFC publishes forecast evaluation reports comparing outturn figures to Budget Act estimates, detailing the reasons for any differences observed. 

A summary of the tax revenue and our resource spend over the period 2019-24 is shown on pages 114-117 and this forms part of our Performance Report. 

Further information on the collection of the devolved taxes is given in the Annual Report and Accounts for the Devolved Taxes for 2023-24, which is published separately.

Performance against the Revenue Scotland Corporate Plan 

The Performance Analysis section serves as a detailed and comprehensive dissection of our Corporate Plan 2021-24. Its primary goal is to illuminate the objectives we’ve set to accomplish our four strategic outcomes. Within this section, we explore our ten key performance indicators (KPIs) and how they relate to each strategic objective. Throughout the Performance Analysis section, a meticulous evaluation of our performance in relation to each strategic objective and its respective KPIs takes place. 

Central to our operations is the Revenue Scotland and Tax Powers Act 2014 (RSTPA), which forms the bedrock of our legal framework. This legislation plays a pivotal role in guiding our endeavors and shaping our operational landscape. Additionally, for a concise overview of KPI outcomes, readers can refer to the performance summary provided.

Excelling in Delivery

Strategic Outcome: we offer user-focused services that are digital by design, and provide value for money, convenience and ease of use for internal and external users. The following KPIs measure our performance towards the Excelling in Delivery Strategic Outcome. 

• KPI 1: Tax collection rate
• KPI 2: Response to user requests
• KPI 3: Tax compliance activity
• KPI 4: Administrative cost of collection.

To achieve this, we have the following objectives: 

• use technology, data and innovation to develop and enhance our tax collection systems and guidance
• adopt continuous improvement processes to make our services more effective and easier to use
• use our statutory powers appropriately to help taxpayers get to the right tax position
• seek to resolve disputes and pursue non-compliance by using our powers proportionately
• develop options for measuring and addressing tax receipt shortfall
• design and deliver systems that are compliant, reliable, efficient and cost-effective
• undertake effective management of assets through their lifecycle
• exemplify best practice in the ways we hold and manage data
• use our expertise in collecting devolved taxes to help shape the development of tax policy and legislation
• design and deliver public services that meet the diverse needs of our users
• include environmental impact as a key principle in our service delivery model
• meet our obligations as a public body and embed the management and mitigation of risk in our planning activities and operations.

The following section, starting with Tax Revenue, details our journey towards “Excelling in Delivery” and achieving this strategic outcome. This section explains how we have connected our strategic outcomes to our KPIs and provides a picture of what we have accomplished and how it ties into our overall success as a modern public body.

Tax revenue

Tax revenues decreased in 2023-24 after a record high in 2022-23. This was driven by a reduction in Residential LBTT revenues, due to a fall in the number of residential transactions, as well as a decrease in SLfT revenues arising from reduced volumes of waste going to landfill. However, revenues were still relatively high compared to pre-pandemic levels. According to KPI 1, our tax collection rate for 2023-24 stood at 99%, consistent with the benchmarks set in 2017-18, 2021-22, and 2022-23. Our service efficiency is evident in KPI 4, which highlights the minimal administrative cost of tax collection. For 2023-24, the collection cost was 0.87%, meeting our set benchmark.

Guidance, advice and support 

The service we provide to taxpayers is central to our core mission. One of our key performance indicators, KPI 2, is a measure of our response times to various service user requests, including phone calls, written correspondence, and the processing of tax repayment claims. We are proud to report throughout 2023-24, we consistently met our ambitious target of a 95% on time response rate – achieving our target for all three years of this Corporate Plan period. 

In 2023-24 we introduced a new LBTT relief, Green Freeports. Green Freeport relief is a tax incentive available for transactions involving land within designated Green Freeport zones, which are large, strategically located areas connected by rail, sea, or air. These zones aim to promote regeneration and job creation, and support the transition to a net-zero economy. The relief from LBTT can be full or partial: full relief applies when at least 90% of the transaction’s value pertains to qualifying land within a Green Freeport, and partial relief applies when at least 10% of the transaction’s value does. 

To support the introduction of this new relief, we introduced new guidance pages, updated existing guidance and delivered webinars which had over 60 attendees. 

A further 2024-25 guidance project plan is now in place for further LBTT pages to be updated. We regularly review any service user feedback on website guidance, acting on this where appropriate.

Ahead of the ADS legislative changes introduced on 1 April 2024, we updated our guidance to support taxpayers to understand the changes being introduced. YouTube videos were also produced. A webinar was delivered to agents followed by a question and answer session to raise awareness and knowledge and attracted over 300 participants. As a result of the webinar we were also invited to present at the Edinburgh Conveyancing Forum. 

SETS was enhanced and will provide users with the appropriate guidance based on the effective date entered into the system. 

Our SLfT team continued to meet regularly and work closely with landfill operators and other industry stakeholders to provide clarity on operational and technical tax matters. 

These initiatives support in achieving our Excelling in Delivery objectives by demonstrating our commitment to using technology, data, and innovation to enhance our tax collection systems and guidance. By adopting continuous improvement processes, we make our services more effective and easier to use, ensuring we meet the diverse needs of our users. Furthermore, our efforts in regularly updating and reviewing guidance reflect our dedication to best practices in data management and our role in shaping tax policy and legislation. 

Through these actions, we not only comply with our obligations as a public body but also weave risk management and mitigation into our planning activities and operations. This approach ensures we design and deliver systems that are compliant, reliable, efficient, and cost-effective.

LBTT: 3-Yearly Lease Reviews 

Leaseholders are required to submit a further tax return every 3 years throughout the duration of their lease. This area of work has proved to be challenging to achieve the levels of understanding and therefore compliance by taxpayers. It is for this reason that we set up a project with the aim of driving up return rates. During 2023-24 we have continued to enhance the three-yearly lease review process for LBTT. More improvements were made to our tax collection system (SETS) and further enhancements will be deployed throughout the next Corporate Plan period. These changes will make the process of submitting a return easier for both taxpayers and agents. 

During 2023-24 we have continued to enhance the three-year lease review process for LBTT. More improvements were made to our tax collection system (SETS) and further enhancements will be deployed throughout the next Corporate Plan period. These changes will make the process of submitting a return easier for both taxpayers and agents. 

The Lease Improvement project team continued to implement enhancements across three work strands: Data, Digital, and Communication and Engagement. From 2023-24, more communications are issued to taxpayers to remind them of their lease review return obligations. This includes an email sent to taxpayers on submission of any lease return. The email reminds taxpayers of their ongoing obligations and provides links to the relevant guidance. The quantity of reminder letters sent to taxpayers as the three-year review point is approached has also increased.

Communications were redesigned using a reading tool to make letters accessible and inclusive. We also hosted a webinar for agents and SETS users to increase their lease knowledge and highlight common errors we are seeing from tax returns. A question and answer session was held and the webinar can be accessed in our YouTube channel to provide ongoing support. 

Several changes were made to SETS during 2023-24. Examples include validation to ensure the submitted return is linked to the original return, pre-population of the tax return for ease of completion, locked fields in areas where the information cannot change and an alert for returns that appear to be non-notifiable. 

These initiatives demonstrate our commitment to using technology, data, and innovation to enhance our tax collection systems and guidance. By adopting continuous improvement processes, we make our services more effective and easier to use, ensuring taxpayers and agents can efficiently fulfil their obligations.

Digital & Data 

In 2023-24 we continued our programme of work to elevate our digital and data capability to ensure we are making the best use of technology and analytics to inform our operations and to support the introduction of new devolved taxes. In July we recruited a Head of Data & Digital to lead this work and create a new digital and data strategy to align with the Corporate Plan period. 

This role leads an expanded Digital and Data function across our organisation, encompassing the existing Information Technology, and Statistics and Management Information teams, and will bring in additional digital roles in 2024-25 to build our internal capability and help us work more effectively with our suppliers. 

The strategy sets out a vision of a single end-to-end digital tax service by 2026-27, where every interaction with a taxpayer or interaction through the entire tax journey will be available in a single view. 

Capital Investment Programme 

The Capital Investment Programme Board oversees the effective management and delivery of the Capital Investment Programme. The programme is well-established, with a remit to identify and monitor all the digital and data priorities outlined in our Corporate Plan.

Throughout the 2023-24 fiscal year, in close collaboration with our suppliers, our programme focused on five key areas of activity, each aimed at enhancing efficiency, accuracy, and user experience across our digital platforms: 

Improved search functionality for external users: 

we optimised indexing within our system to significantly enhance search speed and efficiency. Furthermore, we introduced advanced filtering options to refine search queries, providing users with greater precision in their search results. We also ensured compatibility with a wide range of search parameters and criteria, enhancing the overall user experience and facilitating seamless navigation through the platform. 

New functionality for lease review returns: 

we have successfully developed and implemented a validation process for tenant details, ensuring data accuracy and integrity. Additionally, we have deployed automated data extraction techniques for lease review returns, streamlining pre-population processes to enhance efficiency. Through these efforts, we have diligently maintained the accuracy and reliability of pre-populated data, further strengthening our data management practices. 

Improved validation on Portal: 

we have implemented significant enhancements to our input validation mechanisms aimed at preventing errors and upholding data integrity. Real-time validation feedback is now provided during data entry, ensuring immediate identification and correction of any issues. Additionally, clear and informative error messages have been integrated to guide users through validation challenges, further enhancing the accuracy and reliability of our data.

Portal text enhancements: 

we undertook a review of the text content within our portal, identifying areas for enhancement to improve clarity, readability, and consistency. Subsequently, we diligently addressed and implemented these updates, ensuring uniformity in terminology and messaging throughout the platform. Our efforts were bolstered by incorporating valuable user feedback to enhance content relevance and meet compliance requirements effectively. 

Letter automation: 

we have developed a robust system for automated letter generation, which includes the implementation of secure file transfer protocols to ensure data security. This system seamlessly integrates data input to dynamically populate letter content, streamlining the process while maintaining accuracy through errorchecking mechanisms. Additionally, we have established a user-friendly interface that simplifies the letter creation process, making it intuitive and accessible for all users. 

We successfully implemented ADS legislation changes (1 April 2024), modifying existing workflows and configurations to align with the legislation and incorporating additional data fields to capture required information. 

These efforts demonstrate our commitment to continuous improvement to make our services more effective and easier to use. Through implementing robust validation processes, automated systems, and enhanced search functionalities, we ensure our services remain user-friendly, reliable and reduce the need for corrective action.

However, to fully meet the evolving needs of taxpayers capital funding is critical. Access to this funding is a priority because it will significantly improve our digitalisation efforts, leading to an enhanced taxpayer experience. The ability to invest in modern technologies is vital to overcoming the challenges we face, such as managing increasing volumes of data from new taxes, and ensuring the accuracy and reliability of our services.

Compliance 

Revenue Scotland’s core function is the collection and management of the devolved taxes. This function includes a duty to protect the integrity of the tax system and ensure the correct amount of revenues are collected. We do this by encouraging a culture of responsible taxpaying where individuals and businesses pay their taxes as the Scottish Parliament intended. 

We work to make it as easy as possible for taxpayers to understand and comply with their obligations and pay the right amount of tax, while at the same time working to detect and deter non-compliance. Our approach to tax compliance has three key elements: 

• Enabling – we help taxpayers to understand and comply with their tax obligations through the services we provide. This includes the publication of clear, informative guidance; a user-friendly online system; our support desk; providing tax opinions; and engaging with and upskilling stakeholders, for example, by presenting technical webinars.
• Assurance – we use our resources and statutory powers to ensure the tax system is performing as expected and to help taxpayers to get to the right tax position. This includes checking returns to ensure they are complete, accurate and that the correct amount of tax has been paid; carrying out landfill inspections; sharing intelligence with other tax authorities; and the use of investigatory powers, statutory enquiries and assessments.
• Resolution – we seek to resolve disputes and pursue non-compliance by using our powers proportionately and applying penalties where required. In 2023 we published our Settlement and Litigation Principles which set out our approach to resolving tax disputes.

We continue to work closely with other UK tax authorities, sharing information, intelligence and knowledge with HMRC and the Welsh Revenue Authority (WRA). We do this through legislative gateways and through our formal Information Sharing Agreements. In addition we regularly discuss areas of potential legislative change in partnership with Scottish Government policy colleagues. 

We also regularly meet with bodies such as the Chartered Institute of Taxation (CIOT), the Institute of Chartered Accountants of Scotland (ICAS), the Association of Tax Technicians (ATT), the Law Society of Scotland (LSS), and the Convention of Scottish Local Authorities (COSLA), as well as other industry bodies.

Our data-led approach to identifying tax risks helps to ensure that our compliance resource maximises the level of assurance of the tax system whilst also targeting the most significant risks. The benefits of this approach are reflected in the strong 2023- 24 compliance activity results. 

As measured under KPI 3, our compliance activities secured £35.3 million in tax during the 2023-24 fiscal year. This figure comprises both additional tax secured as well as ‘tax protected’; for example, where we have prevented repayments being made where they are found not to be due, that has arisen as a direct result of our compliance activities. These results may reflect compliance activity that has taken place over a number of years which reached a conclusion during 2023-24. It does not comprise upstream assurance and compliance activity, such as improving our guidance or systems to assist taxpayers to comply with their obligations. 

These efforts align with several of our Excelling in Delivery objectives, including using our statutory powers appropriately to help taxpayers get to the right tax position, seeking to resolve disputes and pursue non-compliance proportionately, and adopting continuous improvement processes to make our services more effective and easier to use.

Disputes 

There are three main routes for taxpayers, agents and other members of the public who wish to dispute an action or decision by us, or on our behalf by our partner organisations. 

Complaints 

Complaints are expressions of dissatisfaction about our action or lack of action, or about the standard of service provided by us or on our behalf. They are distinct from tax disputes. Where complaints are received, we seek to learn from these to improve our operational procedures and processes. Through our complaints handling procedure we aim to resolve taxpayer dissatisfaction as close as possible to the point of service delivery. We conduct thorough and impartial investigations of complaints, so evidence-based decisions can be made on the facts of the case. Our complaints handling process complies with the Scottish Public Services Ombudsman’s (SPSO) guidance. This allows for two opportunities to resolve complaints internally: 

• Stage 1 – frontline resolution (response target timescale – 10 days or less)
• Stage 2 – investigation (response target timescale – 20 days or less).