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).

Tax disputes – reviews and appeals 

We aim to minimise tax disputes by providing clear information and guidance to taxpayers and having robust decision making processes in place. In the event of a dispute, a taxpayer may request an internal review of a decision, request or agree to mediation, or appeal a decision to the Tax Chamber of the First-Tier Tribunal for Scotland (FTTS). 

Taxpayers and their agents have the right to request us to review any decision which affects whether a person is liable to pay tax, the amount of tax due, the date the tax is due and payable and the imposition of a penalty or interest. We must notify the taxpayers or their agents of our view of the matter within 30 days from the day on which we received the review request (or such longer period as reasonable). For the next stage we must inform the taxpayers or their agents of our conclusion of the review and its reasoning within 45 days of sending the Stage 1 response. 

RSTPA sets out the decisions which are reviewable and appealable. An appeal may be made regardless of whether or not a review has been sought or mediation entered into. The FTTS decides appeals against Revenue Scotland decisions, and the Upper Tribunal for Scotland (UTS) decides appeals on a point of law from decisions of the FTTS.

Appeals

We have collected data on litigation since Revenue Scotland was established in 2015. The data shows consistent trends of higher volumes of LBTT appeals compared to SLfT appeals and of the FTTS upholding our decisions in ADS appeals. During 2023-24, twenty-three appeals were initiated in the FTTS, all of which related to LBTT. We saw an increased trend of cases relating to disputes about whether residential or non-residential rates of tax apply. An increase in penalties for failure to make an LBTT return for three-yearly lease reviews gave rise to an increase in the number of appeals received. We expect to see a reduction in ADS appeals following legislative changes introduced from 1 April 2024.

As part of its collection and management functions, Revenue Scotland can make decisions which amend the amount of tax payable following a return, or impose penalties for failure to submit a return or failure to pay tax. Decisions like this are called appealable decisions and can lead to an internal review or ultimately an appeal to the FTTS. In the course of 2023-24, 283 cases went to review. In 213 of those cases, the original decision was upheld. In 63 cases, the initial decisions were cancelled, for instance due to new information received from taxpayers in the course of the review. Of the rest, 2 decisions were varied, 2 were not progressed as reviews and 3 reviews were withdrawn by the taxpayers. 

Over the year, 23 new appeals were raised in the FTTS. All of the 6 cases decided by the FTTS in the course of the year resulted in our original decision being upheld. This shows the vast majority of tax disputes end without the need for litigation, and we carefully consider our position before entering into or continuing with litigation (as demonstrated by the 8 cases which were settled before a hearing).

These figures can also be viewed in the context of 110,900 returns submitted in 2023-24, showing the very low number of reviews and appeals in relation to the overall volume of tax returns. This is testimony to the support and guidance that is available to taxpayers to help them understand and comply with their obligations. For those taxpayers who raise a dispute about a Revenue Scotland decision, we also proactively share examples of previous decisions that will assist taxpayers to understand the rationale for a decision where it is appropriate to do so. It also shows we are prepared to vary our decisions where that is justified and that we litigate responsibly.

Investing in our People

The second strategic outcome in our Corporate Plan 2021-24, “Investing in our People”, reflects the high value our organisation places on staff motivation and engagement. We invest in employee learning and development, as well as health, safety, and wellbeing. This commitment enables us to develop and support a highly skilled workforce that uphold the highest standards of professionalism and integrity. 

Strategic Outcome: 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. The following KPIs measure our performance towards the Investing in our People Strategic Outcome.

• KPI 5: Skills and knowledge development
• KPI 6: People Survey Engagement Index/ Proxy Stress Index

The seven objectives are: 

• ensure our staff have the capability, skills and knowledge to deliver an excellent service
• ensure our staff have the skills and tools required to efficiently access and analyse our data to better inform decision making
• take action to expand the diversity of our workforce and promote access to employment for those with protected characteristics
• be a trusted, valued and respected tax authority which prioritises staff capability, skills and knowledge development
• be a high-performing organisation where staff feel trusted, valued, motivated and empowered – this helps us to create a culture with work/life balance, health, safety, wellbeing and resilience at the heart
• enhance our use of data to inform our capability and capacity requirements for the delivery of our organisational objectives 
• support individuals to have flexible choices on where and when they work.

Our People Strategy 2021-24 has direct links to the Corporate Plan and clear deliverable actions set out in the action plan. Progress against the action plan is reported to our Staffing and Equalities Committee throughout the year. Our People Strategy is underpinned by four themes. These are wide-ranging and ambitious, reflecting our commitment to being an inclusive and agile workforce: 

• engaged
• capable
• diverse
• workforce.

Leadership Development 

Building and maintaining leadership capability continues to be a priority - creating the conditions for staff to thrive. In Revenue Scotland we value our approach to collective leadership as this enables us to lead and manage change effectively. Our successful approach to leading and managing change is captured in the Civil Service People Survey, scoring highly with 76% in the Leadership and Managing change theme with the Civil Service score being 53%. 

The leadership development programme was tailored for the various leadership levels across the organisation, which range from first line managers to senior leadership. This year has also had a focus on succession planning and building the leadership capability of our managers. Developing confident leaders enables us to drive performance and innovation whilst identifying and nurturing our talent. 

These efforts align with our objective to ensure our staff have the capability, skills, and knowledge to deliver excellent service. By continuously investing in leadership development and succession planning we create a high-performing organisation where staff feel trusted, valued, motivated, and empowered. Moreover, enhancing our leadership capability supports our goal of being a trusted, valued, and respected tax authority.

Futures Project 

In May 2023, following a successful pilot, our Board approved hybrid working as our operating model. 

Our hybrid working model delivers excellent service to our users while also considering the health, safety and wellbeing of our staff, the performance of our statutory functions, delivering cost savings, future scalability, and alignment to our strategic aims (including diversity and green recovery). Our hybrid working model offers staff flexibility whilst ensuring business needs are met. 

We undertook a comprehensive options evaluation to consider its longer-term operating model. The evaluation established hybrid working as having the most benefits to the organisation, colleagues, and its service users. The pilot evidenced that hybrid working introduced a more modern and flexible way of working to deliver innovation, collaboration, productivity, equality, inclusion and care for our people and our environment. 

Evaluation of the pilot evidenced we performed well over the period of the pilot. Key Performance Indicators (KPIs) continued to be achieved. Results from the pulse and People Surveys indicated 72% of staff preferred the hybrid model. Colleagues also reported it had a positive impact on their health and wellbeing and they felt more productive.

With a formal move to a hybrid model there is scope to reduce overall emissions. We were also able to reduce our estate footprint during 2023-24 offering value for money. Reducing the office footprint enables staff to benefit from working together from one office space that has been redesigned and contains more collaboration space and a designated quiet working area. Revenue Scotland colleagues also continue to have access to a hub office in Glasgow. 

From 2024-25, we will continue to apply hybrid working principles to support our colleagues to embrace the benefits of home working while retaining the benefits people gain from being together in a workplace. 

This hybrid working model helps us give staff flexible choices about where and when they work. In offering this flexibility, we also ensure our staff have the skills and knowledge to deliver excellent service while feeling trusted, valued, motivated, and empowered. 

A further benefit of adopting hybrid working is that it helps us expand the diversity of our workforce and support employment for people with protected characteristics, contributing to our goal of being a diverse, high-performing public body.

Capability and Skills Audit 

Our Corporate Plan sets out our ambition to be a trusted, valued, and respected tax authority which values and prioritises capability, skills, and knowledge development. 

Our People Strategy sets our commitment to use our data to inform the capabilities we need to become a high-performing organisation as outlined in our Target Operating Model. 

In order to achieve this, we developed a Capability and Skills audit to help us to identify current capability strengths and areas for focus. This information will help drive our plans for increasing capability to deliver on our Corporate Plan for 2024-27. 

By understanding our strengths and weaknesses within our workforce, we can build in flexibility within the workforce to meet demand when required. This will also inform the skills we need to buy, borrow, or build within our current workforce.

The Capability and Skills audit was developed in consultation with leadership colleagues. The audit covers team skills and core skills required for the organisation. The audit has also captured professional qualifications across the nine recognised professions we have within our workforce. The audit was conducted in partnership with staff and their manager and has helped inform development plans for staff. It has also highlighted areas of expertise which will be used to build capability across the organisation increasing our knowledge capital. The audit results are available at organisation and team level and the findings have identified areas for focus in the coming year to increase our data and digital literacy and to continue to support our line managers to build confidence in leading and managing change. The audit will be conducted annually to enable us to track progress and ensure we are continuing to develop the skills we need to deliver the ambitions set out in our Corporate Plan 2024-27.

The Gatherings 

Bringing our staff together in person twice a year is integral to our hybrid way of working. It provides an opportunity for our staff to connect with our organisational objectives and purpose, contributing to our Business Plan and Corporate Plan delivery. 

Our summer gathering was an opportunity for staff and Board members to share feedback on our equality outcomes. Professor Kathleen Riach provided an in-depth session as a celebration of Adam Smith’s tercentenary whose taxation principles, 300 years on, form the basis of the Scottish Approach to Taxation. 

Our New Year gathering took on a new format and we were delighted to be joined by our Board member Right Honourable Ken Macintosh to share stories from his career and his experiences from the Scottish Parliament. Staff had the opportunity to hear from Tom Wilkinson on Scotland’s Artificial Intelligence strategy and what it means for Revenue Scotland. These events are designed by our staff for our staff and provided a great opportunity to network and connect with colleagues old and new.

Health and Wellbeing 

At Revenue Scotland, we are committed to supporting staff health and wellbeing. In July 2023 we introduced the Wellbeing Hour pilot, allowing employees to focus on their health and wellness. A six-month evaluation of this initiative shows positive impacts on staff mental wellbeing. Most employees used the Wellbeing Hour for exercise, highlighting its success in encouraging physical activity. Overall, the pilot has been well-received, with staff appreciating the chance to prioritise their mental health. 

Learning and Development 

Learning and development is a major focus in our People Strategy. We have a KPI for 90% of staff to complete 30 hours or more learning and development each year – and in 2023-24 98% of staff achieved this target. We know having a skilled team is crucial for our success. Our Scottish Tax Education Programme (STEP) which launched in 2019 is the foundation for building capability across the organisation for all staff. This is designed and delivered by our staff, for our staff and builds on our learning from Tribunal cases and legislative knowledge. The STEP programme supports the transfer of knowledge and skills throughout the organisation to ensure the programme’s sustainable delivery. It is a pivotal part of our induction to Revenue Scotland, building understanding of our role as a devolved Tax Authority. We’ve consistently delivered the STEP programme across this last year, providing new team members with a solid foundation through our Induction Programme.

Our main goal has been to enhance our skills and the way we work together. The Professional Qualifications Policy has been a helpful addition, it has allowed our staff to build their professional capability in Health and Safety, Governance, IT, HR and Finance. The learning and development offer for 2023-24 was developed based on learning needs analysis and supported staff to develop their skills against a range of topics. Our induction programme has been updated to reflect our hybrid principles and includes an in person induction and in person on job learning to improve the induction experience and connection with our teams and organisation. 

In addition, learning has also seen a shift towards in person providing the optimum learning experience for our staff, we do continue to offer a blend of in person and virtual learning depending on the subject matter. 

Our learning and development activities ensure our staff have the capability, skills, and knowledge to deliver excellent service. By focusing on professional development and tailored training programs, we help our staff become more effective and informed in their roles, contributing to our strategic outcome. 

Moreover, our commitment to learning and development supports our goal of being a high-performing public body where staff feel trusted, valued, motivated, and empowered. This approach not only improves individual performance but also supports a culture of continuous improvement and resilience within Revenue Scotland.

Civil Service People Survey 

Our People Survey results have continued to progress over the years, seeing Revenue Scotland rise to be in the top 25% of all participating organisations, and in the top six for all survey themes. This performance reflects our organisation’s culture, staff engagement our investment in our people. The 2023 People Survey results saw the engagement continue to increase to 70% from 54% in 2019. The index is comprised of five questions measuring pride, advocacy, attachment, inspiration, and motivation. The Proxy Stress Index remained stable at 21%, this measures factors that cause stress rather than those that alleviate it with a lower percentage score indicating lower stress. The index is based on the Health and Safety Executive stress management standards; demands, control over work, support, relationships, role in organisation and change.

Leading and managing change effectively is a priority for our leaders. Our People Survey results at 76% are 28 percentage-points higher than the Civil Service average score, placing our organisation as third highest in this theme across the 103 Civil Service organisations that took part in the survey. 

We continue to build on our survey results which speak to our ambition in the Corporate Plan to be an exemplary employer and be the employer of choice.

Reaching Out

Strategic Outcome: to build on our reputation as an accessible, collaborative and transparent public body. We are keen to learn from others and share our experience and expertise. The following KPIs measure our performance towards the Reaching Out Strategic Outcome. 

• KPI 7: Service users’ feedback
• KPI 8: Equalities 

To achieve this outcome, we have seven objectives: 

• engage users in the design of our services, maximising the opportunities of technology and drawing on best practice from other service delivery organisations
• help taxpayers to understand and comply with their tax obligations through the services we provide
• engage regularly and effectively with users to keep them informed, content and productive, enabling them to work collaboratively
• effectively communicate data and analysis to our stakeholders and audiences. This includes the provision of high-quality data and advice to support the Scottish Fiscal Commission in its tax forecasting role and the Scottish Government in the development of tax policy
• in our communications, provide the audience with the right information in the right tone and style at the right time
• expand the reach of our engagement to diversify our stakeholder base and sharpen our understanding of equality issues, digital developments, and our operating environment
• as a transparent and open organisation, listen to and engage collaboratively with our staff and our stakeholders.

Stakeholder engagement 

Stakeholder engagement has remained a key focus during 2023-24. Throughout this period, we have undertaken a range of activities to ensure effective communication and collaboration. 

One of our key functions is to provide information and assistance to taxpayers and our partners relating to the devolved taxes. This year, we have organised a number of virtual events covering high-interest topics for taxpayers and tax professionals, covering ADS and leases. These webinars, which included reference to updated guidance on legislative changes, attracted over 300 attendees and received a high satisfaction score. To ensure broader accessibility, we have made these webinars available on our YouTube channel. 

In addition to this, we have been engaging on another of our legislative functions: to provide information, advice and assistance to Scottish Ministers in relation to tax. In this area, we have provided support to the Visitor Levy Bill Team and the Visitor Levy Expert Group on matters relating to self-assessed tax. We have organised a workshop for local authorities to understand more about Revenue Scotland and how we operationalise our taxes in a self-assessed environment.

Regular meetings with Scottish Ministers and their officials have allowed us to provide advice to support the development of policy and legislation in relation to devolved taxation. This engagement focuses on strengthening our existing legislation and supporting the development of new legislation. By providing our expertise and practical experience of managing and administering the devolved taxes, we are able to ensure advice captures the views of taxpayers, tax professionals and Revenue Scotland staff, where appropriate. 

In July, we were visited by the then Deputy First Minister Shona Robison MSP. The Deputy First Minister joined our weekly SLfT meeting with SEPA to see first-hand how our collaborative approach with SEPA works in practice. She was introduced to our Scottish Aggregates Tax team to learn about our approach to introducing Scotland’s third devolved tax. Additionally, she met with members of our Tax Operations team to learn about our new enhanced support policy for supporting taxpayers and agents. 

We have also supplied data and information about the performance of the devolved taxes to the SFC, aiding their independent forecast of Scottish tax revenue. Our commitment to transparency is reflected in the production of official statistics on both devolved taxes, which are published on the Revenue Scotland website. 

We attended Parliament on three separate occasions in 2023-24 to provide evidence to the Finance and Public Administration Committee. In May, our CEO Elaine Lorimer gave evidence on Public Service Reform, sharing Revenue Scotland’s approach to digital services, our shared-services model, and our approach to empowering taxpayers. Following the publication of our Annual Report and Accounts for 2022-23, we were invited by the Committee to provide evidence on our annual performance. Our Chair Aidan O’Carroll and our CEO Elaine Lorimer attended the evidence session, and enjoyed the productive engagement with MSPs. Additionally, we gave evidence on the new Scottish Aggregates Tax Bill to the same Committee.

In November we hosted a reception at the Scottish Parliament to discuss our latest Annual Report and Accounts for 2022- 23. This event featured a keynote speech by Tom Arthur MSP and was attended by representatives from Revenue Scotland, key stakeholders, and MSPs. 

Furthermore, we have engaged with other tax authorities on tax administration issues and collaborated with other public bodies on various corporate matters, including risk management, business planning, and equalities and diversity. 

These efforts align with our objective to effectively communicate data and analysis to our stakeholders and audiences. By providing high-quality data and advice, we support the Scottish Fiscal Commission in its tax forecasting role and the Scottish Government in developing tax policy. 

Our activities reflect our commitment to being a transparent and open public body. We listened to and engaged collaboratively with our staff and stakeholders, ensuring we provided the right information in the right tone and style at the right time. 

Service user feedback 

We are dedicated to placing users of our website, support desk or SETS at the heart of our service. This year, we measured user satisfaction primarily through feedback collected on our main digital platforms: our website revenue.scot and the Scottish Electronic Tax System (SETS). These insights have been invaluable in helping us understand how effectively our digital services are meeting user needs. 

The revenue.scot website attracted over 190,000 visitors, we welcomed 1,400 new users on SETS, and 110,900 tax returns were successfully submitted in 2023-24. To better understand user needs, we implemented feedback forms across both revenue.scot and SETS.

Receiving feedback is crucial for us to understand what is working well and what needs improvement. This year, we received nearly 1,000 pieces of feedback. For example, agents informed us of challenges in locating information on the SETS homepage, particularly regarding penalties and outstanding balances. They also highlighted difficulties in navigating between different pages and filtering/sorting information. 

In response to this feedback, we have made various enhancements to the SETS system over the past year. We improved the homepage, navigation, and search functionalities, and added more features to enable users to search, sort, and filter information effectively. However, there are still areas where we can improve. We aim to enhance how we share information about penalties with agents who act on behalf of taxpayers, and we plan to implement a resolution for this in the upcoming financial year. 

We also received feedback regarding the guidance on our website. In response, we updated our materials, providing clear explanations in plain English and offering guidance in various formats. This year, our focus has been on improving ADS and Leases guidance. We reviewed and expanded examples in the ADS guidance and provided step-by-step videos to help taxpayers better understand and comply with their tax obligations. Next year, we’ll be updating the website to use the Scottish Government Design System, which will enhance accessibility, and we’ll continue refining the guidance based on ongoing feedback.

This is our first year reporting on service user satisfaction, and we consistently met our KPI 7 target, achieving a 76% satisfaction score. Looking ahead to next year, we plan to broaden our approach by collecting feedback across the full range of services we provide, not just from our website and SETS. This expanded approach will allow us to gain a more comprehensive understanding of user experiences and identify opportunities for improvement across all areas of our service delivery.

Equalities 

At Revenue Scotland, we are committed to embedding equality, diversity and inclusion (EDI) at the core of our organisation, both for our staff and the communities we serve. In May 2022, an Internal Audit review of our Equalities performance confirmed the progress of our EDI initiatives and provided valuable insights. 

We embraced its findings, using them as a springboard to become more peoplefocused and outcome-driven, shifting our emphasis from process to meaningful engagement. This year, we completed all the actions flowing from that review and they are described here - Revenue Scotland - Equalities Mainstreaming report 2024-2028 | Revenue Scotland. 

Our objective was to highlight our achievements clearly by showing specific examples. We champion EDI - for instance we have enhanced the accessibility of our website and our learning offer to our staff – see below.

The outcomes we advanced this year, as detailed in the Equalities Mainstreaming Progress Report 2020-22, were: 

• Equality Outcome 1: Revenue Scotland will design and deliver public services that meet the diverse needs of its users 
• Equality Outcome 2: Revenue Scotland is building an increasingly diverse workforce that fully embraces equality, diversity, and respect for all 

The Revenue Scotland Equalities Mainstreaming Report 2024-2028 also shows the work that has taken place up to 31 March 2024 to embed the Public Sector Equality Duty (PSED) into our operations and demonstrates our readiness to be held accountable for the next reporting cycle. Our new outcomes for 2024-28 are aimed at driving progress and meaningful change to deliver better outcomes for our staff and service users. 

Our Equalities Steering Group (ESG) and Equalities Working Group (EWG) are made up of staff from across our teams and the Steering Group benefits from a member external, thereby bringing cross fertilisation of thinking. Along with EDI Champions (an advocacy type role which staff volunteer for), these groups have been pivotal in setting the strategic direction for our work in this area and ensuring EDI remains at the forefront of our decision-making. 

Our leadership team, including the Board and CEO, has strongly supported our EDI work, ensuring these values are integral to our culture.

Celebrating our 2023-24 Achievements: 

• We successfully met our KPI for the year, demonstrating our commitment to delivering on the challenging outcomes and actions we set for ourselves
• We conducted a thorough period of internal and external consultation to gather views on our new outcomes for the 2024-28 period. This ensured the perspectives of our staff and service users are reflected in our new outcomes
• We enhanced the technical aspects of our services, including significant upgrades to accessibility and assistive technologies on our website. We introduced the Recite Me tool, a suite of accessibility tools designed to make our website more inclusive. This allows users to customise their browsing experience with features like text-to-speech, translation, and adjustable display settings to better meet their individual needs 

Our success is also reflected in a number of key projects that have significantly contributed to our goal of becoming an increasingly equal, diverse, and inclusive public body:

• Following an internal review, we relaunched our revised suite of Equality Impact Assessment tools and materials for our staff, leading to enhanced EDI outcomes for both our staff and service users
• We continued to offer our Enhanced Support services to the public, with notable positive impacts
• Through our Health & Wellbeing group, we have elevated our EDI staff engagement and profile by running awareness campaigns and participating in events such as Pride for the first time

Our efforts to develop a more inclusive culture are reflected in the People Survey results related to employee experience, equality, and diversity, reflecting the positive impact of our EDI initiatives. Our commitment to EDI is further demonstrated by our inclusive recruitment approach by using inclusive language in job adverts, improving our careers information to celebrate our culture and removing barriers within the recruitment process by sharing interview questions in advance to all candidates. Revenue Scotland colleagues are also encouraged to record their diversity information. This information is used to monitor how we are performing as a truly representative organisation. Revenue Scotland ranked second highest across Civil Service for inclusion and fair treatment in the 2023 People Survey. 

While we acknowledge that there is still work to be done, we stand ready and fully engaged to continue our EDI journey. Together, we will keep pushing boundaries and setting new standards for equality, diversity, and inclusion within Scotland’s public sector.

Volunteering 

Volunteering provides many benefits to both mental and physical health. Employees of Revenue Scotland are allowed up to six days of volunteering per year and they can use them in different ways, including group volunteer days. 

In December 2023, a group of five colleagues from Revenue Scotland visited Empty Kitchen, Full Hearts (EKFH) a charity based in Edinburgh. Their main mission is to relieve poverty by providing free, healthy, nutritious meals made from surplus food donated by a wide variety of suppliers. Part of this initiative involves the delivery of meal packs to homes or local community hubs as well as offering onsite meals on Fridays. 

The day began by chopping vegetables in the morning that would go into a hearty vegetable soup and also to be part of a Christmas dinner that the people in need would be receiving as we were only days away from Christmas. The afternoon consisted of decanting some of the earlier prepared food to produce the meal packs, consisting of two days’ nutritious food per person. 

The team was really struck by the great work and fantastic spirit by all of the team at EKFH, and how welcoming and friendly they were. In addition to that the opportunity for them all to do something so positive together and be supported by Revenue Scotland in doing so was a great experience. This was an excellent opportunity to get to know each other better and contribute to our wider community in a meaningful way. Everyone involved remarked how much they’d enjoyed the day and wanted to do this again.

This volunteering initiative supports our objective to expand the reach of our engagement to diversify our stakeholder base and sharpen our understanding of equality issues, and our operating environment. By engaging in community service, we build stronger relationships and enhance our understanding of the communities we serve.