Scottish Income Tax HMRC annual report 2022
Updated 21 December 2023
Applies to Scotland
© Crown copyright 2023
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/scottish-income-tax-hmrc-annual-report-2022/scottish-income-tax-hmrc-annual-report-2022
Purpose
The Scotland Act 2012 enabled the Scottish Parliament to set a Scottish rate of Income Tax to apply to the non-savings and non-dividend income of Scottish taxpayers. This power was exercised for the first and only time in February 2016 setting a rate of 10% for the 2016 to 2017 tax year. The power to set a Scottish rate was superseded by the Scotland Act 2016, which provides the Scottish Parliament with further Scottish Income Tax (SIT) powers – enabling the setting of Income Tax rates and thresholds that apply to the non-savings and non-dividend income of Scottish taxpayers.
The tables below show how this further power was exercised in 2021 to 2022, and the 2021 to 2022 England and Northern Ireland rates as a comparison.
Scottish Income Tax and England and Northern Ireland Rates in 2021 to 2022
Scottish rates 2021 to 2022
| Rates | Bands |
|---|---|
| 19% | £12,570 - £14,667 |
| 20% | £14,668 - £25,296 |
| 21% | £25,297 - £43,662 |
| 41% | £43,663 - £150,000 |
| 46% | £150,001+ |
England and Northern Ireland rates 2021 to 2022
| Rates | Bands |
|---|---|
| 20% | £12,570 - £50,270 |
| 40% | £50,271 - £150,000 |
| 45% | £150,001+ |
HMRC administers SIT through existing Pay As You Earn (PAYE) and Self Assessment processes, including those for Income Tax compliance and communications. This ensures the correct amount of tax is collected. In the vast majority of cases Scottish taxpayers will notice no difference in how HMRC interacts with them.
One of the key requirements of HMRC’s administration of SIT is for HMRC to report annually on its delivery of the agreed services. This report sets out information about HMRC’s administration in 2021 to 2022, covering:
- identification and assurance of Scottish taxpayers
- compliance activity (including identification of Scottish taxpayers)
- the collection of and accounting for SIT revenues
- customer service and support
- data for SIT rate setting and forecasting
- data for Scottish Government cash management
- the costs of delivering SIT and the recharging of HMRC costs
Section 1: Identification and assurance
Who is a Scottish taxpayer?
For most people, whether or not they are a Scottish taxpayer in a given tax year is a straightforward matter. Individuals who live in Scotland, and have their sole or main place of residence there, are Scottish taxpayers. Those whose sole or main place of residence is located elsewhere in the UK are not Scottish taxpayers. A Scottish taxpayer must be resident in the UK for Income Tax purposes.
If a person has more than one place of residence, it will be where their main place or places of residence are. If a person has 2 or more ‘main places of residence’ in different parts of the UK it will be if their main place of residence was in Scotland for more of the year than it has been in any other part of the UK.
Scottish parliamentarians are also Scottish taxpayers, regardless of their address. As they are not subject to the normal business rules regarding residency, we operate a separate process to ensure they have the correct residency status applied.
Identification and assurance work
The National Audit Office (NAO) highlights identifying Scottish taxpayers as the key challenge of HMRC’s administration of SIT. There is no definitive data set of Scottish residents against which to judge success, but we are confident in our identification of Scottish taxpayers.
The population is not static, and the latest figures suggest that an estimated 75,000 people (not all of whom will be taxpayers) move across the border each year, about 40,000 from the rest of the UK to Scotland and 30,000 in the other direction. Work to identify Scottish taxpayers is therefore an on-going process, and we work closely with the Scottish Government to ensure that this remains robust.
Third party data clash
In 2021, we worked with an external supplier to carry out a third party data clash. This is where HMRC’s address data for individuals across the UK is compared with data held by third parties, for example the electoral roll and credit reference agencies. Under our current arrangements with the Scottish Government we conduct a data clash every other year.
Where the initial scan indicated that an individual may live in a different region than that recorded in HMRC’s address data, we wrote to these individuals asking them to ensure the address HMRC held for them was accurate. In 2021, we wrote to approximately 8,000 individuals.
Following the initial scan carried out by our supplier, we carried out our own analysis of the results to assess the accuracy of HMRC’s identification of Scottish taxpayers. We compared records unmatched in the initial scan against the latest Pay As You Earn (PAYE) and Self Assessment records. Analysis following the latest scan suggested that the correct Scottish taxpayer status has been applied in 98 to 99% of cases. The remaining 1% to 2% are not necessarily wrong, but they are uncorroborated.
The uncorroborated cases are likely to be in respect of ceased or inactive accounts which is why we were unable to identify them in our data. Therefore, there is no risk to SIT revenues of failing to corroborate these records as Scottish taxpayers as there is no Income Tax liability for them.
These results are in line with the analysis of previous scan results, and provides evidence that the accuracy of HMRC’s address data remains high.
Data updates
Postcodes and the properties within them occasionally change to reflect new properties being built and subdivision of existing properties. HMRC receives quarterly postcode updates from the Office of National Statistics and updates its processes for flagging Scottish residency to ensure ongoing accuracy of HMRC’s record of postcodes and their residency statuses. During the 2021 to 2022 tax year, we received and processed postcode updates.
Postcode scans
HMRC conducts scans to identify any data quality issues and make corrections. There will always be the need to assure the quality of the data we receive, and this is not an issue specific to SIT. Our address data comes from a variety of sources, including individuals, employers and other government departments. The vast majority of the address data recorded on our systems has no issues, however a small minority requires correcting.
HMRC relies on data from external sources in order to complete our records, and issues with the quality of the data we receive are outside our control. We have a program of work in place to ensure that any data issues for Scottish taxpayer records are identified and corrected, preventing any loss of revenue to the Scottish Government.
The scan to assure the quality of our address data operates in 2 parts:
- identification of taxpayer records with a Scottish postcode prefix but where the postcode is not recorded on HMRC’s list of live and deleted Scottish postcodes
- identification of taxpayer records with a blank postcode but which has a key word in the body of the address that indicates it is a Scottish postcode, eg Aberdeen
Results of the scan in 2021 to 2022
| Type of error | Employment | Pension | Change from 2020 to 2021 |
|---|---|---|---|
| Invalid postcode | 2,046 | 120 | -60.7% |
| Blank postcode | 680 | 185 | -77.9% |
All cases where an individual had either an employment or a pension were corrected to ensure that the correct residency status was applied for the tax year. This ensures that the Scottish Government does not lose any tax as a result of data quality issues.
Communications
Communication is crucial to our efforts to accurately identify Scottish taxpayers. HMRC has continued to use the extensive existing channels of communications it has with taxpayers and employers to reinforce key messages on SIT. Communications to customers have been through channels including online social media, the Personal Tax Account, and the Annual Tax Summaries. These communications have focused on the need for customers to update their address details with HMRC when they move.
HMRC’s communications with employers have been through channels including the Employer Bulletin, Agent Update, Customer Compliance Managers’ engagement with large businesses and public bodies, forums for employers, payroll managers and agents, gov.uk, and online social media. These communications have focused on reminding employers of the importance of them correctly applying the ‘S’ codes issued to them by HMRC.
Employers’ application of Scottish codes
When HMRC identifies an individual in PAYE as a Scottish taxpayer, a code is issued to their employer for them to operate. All tax codes for Scottish taxpayers have an ‘S’ prefix. The vast majority of employers operate the codes issued to them with the ‘S’ prefix, but a small minority do not and instead operate the rest of UK version of the code, without the ‘S’ prefix.
Individuals impacted by these errors are still identified as Scottish taxpayers by HMRC, and the correct amount of tax is paid to the Scottish Government. However, when an employer operates a code without the ‘S’ prefix the Scottish rates are not applied, although end of year reconciliation ensures that any over- or under-payments are corrected.
HMRC has a program of work in place to support employers to correctly apply the Scottish codes issued to them. We carry out regular scans to monitor how many employments are missing the ‘S’ prefix.
Employments missing the ‘S’ prefix in 2021 to 2022
| Month | % of employments missing the ‘S’ prefix | Change from 2020 to 2021 |
|---|---|---|
| Apr-21 | 1.18% | -0.14% |
| Jul-21 | 0.82% | -0.49% |
| Oct-21 | 0.93% | -0.43% |
| Jan-22 | 1.11% | -0.16% |
The issue of employers not applying the codes issued to them by HMRC is much broader than SIT, and there are a number of reasons why this occurs. In many cases, employers failing to apply ‘S’ codes relates to a software error or missing update.
Our approach to tackling missing ‘S’ prefixes therefore focuses on reminding, educating, and supporting employers to correctly apply the codes issued to them. Where this is not happening, we reissue codes to employers to notify them of the error and, where possible in cases where employers are continually getting this wrong, we contact the employer to understand why and help them to get it right.
This approach has successfully reduced the error rate for employments missing the ‘S’ prefix from around 4% in 2019-20 to around 1% in 2021 to 2022. The scans conducted in 2021 to 2022 showed that in each month the error rate was lower than it had been in the same month in 2020 to 2021. We will continue to work with the Scottish Government and employers to drive the error rate as low as possible.
Section 2: Compliance
Compliance checks into tax affairs of Scottish taxpayers
HMRC assesses compliance risks and undertakes checks into the tax affairs of UK taxpayers, including Scottish taxpayers. HMRC applies risk-based compliance activity to the collection of SIT in the same way as is applied to the collection of income tax from taxpayers in the rest of the UK. This includes conducting enquiries into Scottish Self Assessment (SA) taxpayers. The Scottish Government is not recharged for this activity.
Due to the interaction of PAYE, Self Assessment and tax legislation, HMRC looks at risks over multiple years in order to take the most appropriate compliance action.
The changes to SIT rates in 2021 to 2022 were limited to the movement of thresholds. There remains divergence around the higher rate threshold; the threshold increased in Scotland to £43,663 while it increased to £50,270 in the rest of the UK. Again, although the differential in tax paid between customers in Scotland and the rest of the UK remained, the actual tax paid by Scottish Taxpayers individually reduced due to the increase in Personal Allowance.
It would appear a correction is needed to the Compliance section of the 2020 to 2021 Annual Report where the incorrect Higher Rate Threshold figure was used in the publication,
The net effect of changes introduced in the Scottish budget for 2021 to 2022 together with changes over the same period for England, Northern Ireland, and Wales (NB no change in Welsh Rates of Income Tax) meant that the divergence changed very slightly over 2021 to 2022. In effect, however, the difference is too small to make a difference to the assessed risk from SIT.
Overall, HMRC currently assesses the increased risk of a non-compliant behavioural response from customers as a result of the differences between rates and thresholds in Scotland and the rest of the UK to be low.
Address assurance
For all individuals, whether in Self Assessment or PAYE, HMRC continues to monitor cross-border migration trends through comparison of customer base, analysis of tax returns and changes to tax accounts. This identifies possible evidence of customer behavioural response and validates the accuracy of reported moves and the completeness of HMRC’s address data. HMRC will also continue communications that reinforce the need for customers to update address details with HMRC when they move.
Separate work was undertaken by HMRC to look at customers moving from Scotland and whether this move was evidenced by a physical change of address. Initial results from an exercise using Land Registry data to identify whether customers moving from Scotland and had notified HMRC of their change of address, indicated that the majority had.
Wealthy Individuals
HMRC has continued to use the existing Customer Compliance Manager (CCM) model and other interactions with wealthy customers to raise awareness, educate about SIT obligations and assess compliance risk related to misrepresentation of Scottish taxpayer status or understatement of income liable to SIT. A specific SIT lead within HMRC’s Wealthy Taxpayer Unit oversees activity in relation to these customers.
Employer compliance/assurance
HMRC acts to ensure that the Scottish ‘S code’ is being accurately and correctly applied in the PAYE regime, carrying out reviews to test employer application of ‘S codes’ issued by HMRC. Any employer not applying the correct code is sent a reminder and HMRC monitors the response to identify employers who may require further intervention.
Timing
In addition to the Real Time Information Reviews carried out in-year, the end of year PAYE reconciliation programme checks the tax deducted against the tax due for all customers. Any underpayments are collected from the customer, usually through an adjustment to the subsequent year’s PAYE code, and any overpayments are refunded.
Self-employed customers are on an annual return cycle and Self Assessment returns for 2020 to 2021 tax year were not required to be submitted until January 2022. Compliance checks on 2020 to 2021 returns would therefore generally commence in 2022, although enquiries may be opened earlier for returns submitted before the deadline.
The majority of enquiries into 2020 to 2021 returns would not, however, begin immediately after the submission of returns as assessments of risk must take place first.
Section 3: SIT revenues, rate setting and forecasting
HMRC collects SIT through the PAYE and Self Assessment systems. It pays SIT revenues into the UK Consolidated Fund and these revenues are subsequently transferred to the Scottish Government and the Scottish Government’s resource block grant is reduced accordingly, reflecting its revenue-raising powers.
In July 2022 HMRC also released a statistical publication, SIT Outturn Statistics, which included the information shown in the HMRC accounts and further breakdowns of SIT and equivalent information for taxpayers in the rest of the UK. The outturn is calculated following the submission deadline for Self Assessment returns, meaning there is a delay between the end of the tax year and the publication of the outturn for that year. The 2021 to 2022 outturn will not be published until 2023.
From tax year 2019 to 2020, a proportion of Income Tax paid by taxpayers living in Wales has been transferred to the Welsh Government through the introduction of the Welsh Rates of Income Tax (WRIT). WRIT is controlled by the Welsh Government (WG). HMRC publishes separate statistics on Welsh Income Tax. This means it is no longer appropriate to include Welsh non-savings, non-dividend (NSND) Income Tax when comparing Scottish NSND Income Tax growth to rest of UK (rUK) NSND Income Tax growth.
SIT outturn 2020 to 2021
For 2020 to 2021, the amount of Income Tax attributable to the Scottish Government budget is £11.948 billion. The table below shows the revenue from Income Tax on non-savings/non-dividend (NSND) income for SIT and rUK taxpayers in 2020 to 2021. The table also shows the components of the figures. The rUK figure does not include any tax on NSND income from Scottish taxpayers, as it is all SIT.
2020 to 2021 Income Tax Revenue from Non-saving, Non-Dividend (NSND) Income of Scottish and non-Scottish Taxpayers (based on Scottish powers from Scotland Act 2016)
| rUK NSND (£bn) | Scottish NSND (£bn) | |
|---|---|---|
| Self Assessment established liability | 94.068 | 5.116 |
| PAYE established liability | 68.671 | 6.884 |
| Estimated further liability | 5.461 | 0.315 |
| Less: adjustment for uncollectable amounts | (1.694) | (0.097) |
| Reliefs Relief at Source (RAS) | (1.841) | (0.155) |
| Gift Aid | (1.294) | (0.114) |
| Final Revenue for the tax year 2019-20 | 163.460 | 11.948 |
The time lag in confirming the actual SIT outturn amount for 2020 to 2021 is due to the PAYE and Self Assessment processes. To administer PAYE for taxpayers, HMRC undertakes an end-of-year-reconciliation to assess whether individuals have paid too much or too little tax in any given tax year. Similarly, taxpayers are not required to submit Self Assessment returns to HMRC until 10 months after the end of the tax year to which they relate.
HMRC has worked closely with the Scottish Government to develop an agreed work plan. This details the analysis and data that HMRC will provide to the Scottish Government to support them in their analytical work. Officials meet regularly to ensure new priorities are discussed and factored in against existing commitments. As part of this, both parties have agreed what new information would be useful to help provide more understanding of the SIT outturn. HMRC has also produced and shared other information to support the Scottish Fiscal Commission’s forecasting and the calculation for the block grant adjustment.
Data for SIT rate setting and forecasting
HMRC provides the Scottish Government with relevant data for SIT, alongside the Scottish Fiscal Commission. At a UK level, these tasks are fulfilled using the Survey of Personal Incomes (SPI).
The SPI is compiled to provide a quantified evidence base from which to cost proposed changes to tax rates, personal allowances and other tax reliefs for Treasury Ministers. It is used to inform policy decisions within HMRC and HM Treasury, as well as for tax modelling and forecasting purposes.
The SPI is based on information held by HMRC on individuals who could be liable to UK tax. It is carried out annually by HMRC and covers income assessable to tax for each tax year. Not all individuals are taxpayers because the operation of personal reliefs and allowances may remove them from liability. Where income exceeds the threshold for operation of PAYE, the survey provides the most comprehensive and accurate official source of data on personal incomes.
HMRC continues to work with the Scottish Government and Scottish Fiscal Commission to ensure the information provided meets their requirements and supports forecasting and rate setting for Scotland. This SPI data set will subsequently be published to enable researchers and academics to use it for statistical purposes.
In addition to this, HMRC also publishes a devolved Income Tax statistical publication. The publication includes:
- the SIT outturn for 2020 to 2021, in line with the Trust Statement
- the rest of the United Kingdom non-savings, non-dividends outturn equivalent for 2020 to 2021, by component
- the number of SIT and rest of the United Kingdom non-savings, non-dividends taxpayers by tax band
- the amount of SIT and rest of the United Kingdom non-savings, non-dividend liability split by collection method (PAYE or Self Assessment)
- the monthly Real Time Information (RTI) receipts series for Scottish and non-Scottish taxpayers for 2016 to 2017, 2017 to 2018, 2018 to 2019, 2019 to 2020, 2020 to 2021, and 2021 to 2022
HMRC intends to continue to publish this statistical publication annually alongside the Annual Report and Accounts. This will help inform the Scottish Government and Scottish Fiscal Commission with their analysis, as well as researchers and academics.
Section 4: Customer service and support
HMRC applies the same level of customer service, support and transparency to Scottish taxpayers as is applied to Income Taxpayers in the rest of the UK.
HMRC administers SIT as part of the UK Income Tax system. In the vast majority of circumstances Scottish taxpayers will notice no difference in the manner in which HMRC interacts with them. This approach also ensures that the correct amount of tax is collected.
SIT is collected through existing PAYE and Self Assessment processes, which have been adapted to reflect SIT rates and thresholds. Scottish taxpayers use HMRC’s usual guidance and customer contact channels for advice and information.
In the majority of areas customer service provided to Scottish taxpayers will therefore be included and reported within HMRC’s UK-wide customer service reporting.
The customer service and support for Scottish taxpayers, agents and employers that HMRC has incorporated into its existing processes includes the following:
- providing all Scottish taxpayers and their employers with Scottish tax codes (reflecting the changed higher rate threshold decided on by the Scottish Parliament) prior to the start of the tax year
- annual tax summaries issued to all Scottish taxpayers
- updating online calculators prior to the start of the tax year with the SIT rates/thresholds set by the Scottish Parliament to ensure they remain accurate for Scottish taxpayers
- guidance for payroll software providers on how to correctly incorporate Scottish rates/thresholds into their PAYE products for employers
- guidance on how Scottish taxpayer status is decided and what to do if you feel HMRC has wrongly identified your status
- encouraging customers to update their personal details, focusing on the use of Personal Tax Account
- issuing paper tax tables to digitally exempt employers prior to the start of the tax year reflecting Scottish rates and thresholds
While most interactions Scottish customers have with HMRC are via existing processes, and the customer service therefore reported within UK figures, some aspects of customer service are specific to SIT, eg guidance on Scottish taxpayer status and the ability to discuss with HMRC if there are disagreements over the Scottish residency status given.
It is important that HMRC can demonstrate that its customer service in these areas matches what it provides across the UK as a whole. The Service Level Agreement between HMRC and the Scottish Government therefore commits HMRC to collect and report on key, SIT specific, customer contact metrics. The key metrics for 2021 to 2022 are outlined in Annex A to this report.
Section 5: Governance and oversight
Governance arrangements
The governance arrangements in place for HMRC’s administration of SIT ensure that we are fulfilling our obligations and meeting the needs of the Scottish Government. HMRC’s administration of SIT is governed jointly by HMRC and the Scottish Government, and we work closely with them to ensure that there is sufficient oversight of our administration of SIT.
Service Level Agreement
Our Service Level Agreement (SLA) with the Scottish Government sets out HMRC’s obligations for administering SIT, and the performance measures for monitoring this. It ensures a consistent quality of service to Scottish taxpayers and allows HMRC and the Scottish Government to meet their respective responsibilities.
The SLA is reviewed annually by HMRC and the Scottish Government. For the 2021 to 2022 tax year, only minor changes were agreed. This included adding a commitment on continuous improvement, setting out that HMRC will, in line with its practices, ensure that improvements to its processes and procedures for administering SIT are implemented where possible and cost effective.
The signatories to the SLA in HMRC and the Scottish Government meet twice a year to review HMRC’s progress in administering SIT.
SIT Board
The SIT Board meets quarterly to review HMRC’s administration of SIT. It is comprised of representatives from both HMRC and the Scottish Government, drawing its membership from areas across HMRC which have a key role to play in our administration of SIT. Chairing responsibilities are shared between HMRC and the Scottish Government.
In 2021 to 2022, the SIT Board discussed a range of matters related to HMRC’s administration of SIT. This included approving the methodology for calculating the 2020 to 2021 Scottish outturn, approving the costs to be recharged to the Scottish Government, agreeing the proposed changes to the SLA, and reviewing the Compliance Plan for 2021 to 2022.
Due to the Covid-19 pandemic, during 2021 to 2022 all meetings of the SIT Board were held virtually. Ordinarily meetings alternate between London and Edinburgh.
Devolved Analytical Working Group
The Devolved Analytical Working Group is comprised of representatives from HMRC, the Scottish Government, the Welsh Government, the Office for Budget Responsibility (OBR), and the Scottish Fiscal Commission.
The working group meets regularly, and discusses, among other things, the methodology HMRC uses to calculate the SIT outturn, and other analytical work carried out by HMRC for the Scottish Government.
Financial arrangements
Under the Fiscal Framework Agreement between the UK and Scottish Government, the Scottish Government reimburses HMRC for net additional costs wholly and necessarily incurred as a result of the implementation and administration of SIT.
HMRC has a robust process in place to ensure that we accurately identify the costs of administering SIT. We ensure we provide the Scottish Government with sufficient evidence allow the Scottish Government to assure itself of the accuracy of the costs to be recharged.
As part of this process, we have in place the Rechargeable Costs Framework to set out our approach to and obligations for recharging costs to the Scottish Government. This is annexed to the SLA and is reviewed annually.
We provide the Scottish Government with a report each month to ensure they have a timely view of the costs to be recharged, which happens on a quarterly basis. An invoice is only raised once the SIT Board has satisfied itself that the costs are accurate.
In 2021 to 2022, the costs recharged to the Scottish Government by HMRC for the administration of SIT were:
Costs HMRC recharged to the Scottish Government for SIT administration in 2021 to 2022
| Quarter 1 (£m) | Quarter 2 (£m) | Quarter 3 (£m) | Quarter 4 (£m) | Full year (£m) | |
|---|---|---|---|---|---|
| Implementation and operating costs | 0.13 | 0.12 | 0.17 | 0.19 | 0.60 |
HMRC recharges both the costs of implementing and the costs of operating SIT. Implementation costs were the initial costs of setting up HMRC’s administration of SIT, whilst operating costs are the day-to-day costs of this administration.
The charts below show the historic costs of implementing and operating SIT that have been recharged to the Scottish Government, and how implementation costs have, over time, reduced. Were the Scottish Government to make further changes to SIT, there would likely be further implementation costs.
Costs of implementing and operating SIT recharged to the Scottish Government in previous years
| 2014-15 (£m) | 2015-16 (£m) | 2016-17 (£m) | 2017-18 (£m) | 2018-19 (£m) | 2019-20 (£m) | 2020 to 2021 (£m) | 2021 to 2022 (£m) | |
|---|---|---|---|---|---|---|---|---|
| Implementation costs | 1.97 | 8.13 | 6.08 | 4.48 | 2.04 | 0.56 | n/a | n/a |
| Operating costs | N/A | N/A | 0.17 | 0.35 | 0.78 | 0.89 | 0.72 | 0.60 |
| Total cost of Scottish Income Tax invoiced in financial year | 1.74 | 8.36 | 6.25 | 4.83 | 2.82 | 1.45 | 0.72 | 0.60 |
Notes:
- Costs were first incurred for 2012 to 2013, however this table focuses on more recent costs.
- For ‘total cost of Scottish Income Tax invoiced in final year’, figures shown may not be an exact sum of implementation and operating costs due to invoicing schedules.
External scrutiny
In addition to the internal governance structure agreed by HMRC and the Scottish Government, HMRC’s administration of SIT is also overseen by several external bodies.
The National Audit Office
NAO audits HMRC’s administration of SIT annually. In January 2022, the NAO published its report into HMRC’s performance in 2020 to 2021. The report found that ‘HMRC has adequate rules and procedures in place to ensure the proper assessment and collection of SIT and those rules are being complied with.’
The NAO did not make any recommendations for improvement, and their positive assessment of HMRC’s administration of SIT provides us with assurance that we are fulfilling our obligations and maintaining a high level of service to both the Scottish Government and Scottish taxpayers.
The NAO’s report into HMRC’s administration of SIT in 2021 to 2022 is expected to be published in January 2023.
Audit Scotland
Audit Scotland also report on HMRC’s administration of SIT, and their report into HMRC’s performance in 2020 to 2021 was published in January 2022. Their findings reflected those of the NAO, and they commented that ‘The National Audit Office’s approach to providing assurance over SIT is reasonable and covers the key audit risks.’
Scottish Parliament
HMRC administers SIT on behalf of the Scottish Government, and as such is also accountable to the Scottish Parliament for our performance in doing so. As part of the implementation of SIT, HMRC appointed an Additional Accounting Officer (AAO), who is available to give evidence to committees of the Scottish Parliament. The current AAO is Jonathan Athow, Director General for Customer Strategy and Tax Design.
Annex A: Annual Business Intelligence Report 20201 to 2022
Customer contact – telephone
HMRC has a SIT telephone route within the HMRC Personal Tax helpline. This gives customers generic, pre-recorded SIT messages prior to speaking to an HMRC customer adviser. These figures do not represent all calls by Scottish taxpayers to HMRC.
Phone calls received and answered
| Month | Calls received in 2021 to 2022 | Calls received in 2020 to 2021 | Calls received in 2019 to 2020 | Calls answered in 2021 to 2022 | Calls answered in 2020 to 2021 | Calls answered in 2019 to 2020 |
|---|---|---|---|---|---|---|
| Apr-21 | N/A | 11 | 99 | N/A | 8 | 65 |
| May-21 | N/A | 11 | 59 | N/A | 6 | 41 |
| Jun-21 | N/A | 24 | 42 | N/A | 19 | 35 |
| Jul-21 | 20 | 21 | 64 | 14 | 20 | 51 |
| Aug-21 | 26 | 10 | 29 | 21 | 8 | 26 |
| Sep-21 | 16 | 22 | 34 | 15 | 19 | 31 |
| Oct-21 | 20 | 16 | 33 | 19 | 13 | 27 |
| Nov-21 | 20 | 10 | 39 | 17 | 4 | 32 |
| Dec-21 | 20 | 16 | 19 | 18 | 13 | 17 |
| Jan-22 | 20 | N/A | 41 | 17 | N/A | 33 |
| Feb-22 | 25 | N/A | 46 | 22 | N/A | 37 |
| Mar-22 | 28 | N/A | 35 | 21 | N/A | 27 |
| Total | 195 | 141 | 540 | 164 | 110 | 422 |
Customer contact - complaints
HMRC tracks all SIT customer complaints to ensure they are processed within the HMRC customer service targets. These figures do not represent all customer complaints received from Scottish taxpayers.
Customer complaints
| Month | Complaints in 2021 to 2022 | Complaints in 2020 to 2021 | Complaints in 2019 to 2020 | 15 day target (80%) met in 2021 to 2022 | 15 day target (80%) met in 2020 to 2021 | 15 day target (80%) met in 2019 to 2020 |
|---|---|---|---|---|---|---|
| Apr-21 | 9 | 2 | 10 | 55.6% | 100% | 100% |
| May-21 | 5 | 3 | 6 | 58.1% | 40% | 100% |
| Jun-21 | 7 | 2 | 5 | 59.1% | 88.5% | 100% |
| Jul-21 | 2 | 5 | 1 | 47.6% | 50% | 100% |
| Aug-21 | 6 | 3 | 6 | 40.7% | 36.4% | 90.3% |
| Sep-21 | 1 | 1 | 1 | 42.9% | 33.5% | 90.6% |
| Oct-21 | 4 | 8 | 4 | 47.6% | 52.2% | 84.6% |
| Nov-21 | 2 | 5 | 0 | 40.7% | 53.6% | 84.6% |
| Dec-21 | 1 | 3 | 3 | 42.9% | 54.8% | 85.7% |
| Jan-22 | 2 | 5 | 4 | 40% | 55.6% | 86.7% |
| Feb-22 | 0 | 7 | 3 | N/A | 58.1% | 87.2% |
| Mar-22 | 0 | 1 | 6 | N/A | 59.1% | 88.5% |
| Total | 39 | 45 | 49 | 47.5% | 57% | 91.5% |
Web hits
HMRC has several SIT-related webpages on GOV.UK and hits to these pages are monitored:
- Income Tax in Scotland
- Guidance: work out if you’ll pay SIT
- Internal manual: SIT guidance
- Tell HMRC about a change in personal details, which is used by customers across the UK
Web hits for Income Tax in Scotland
| Month | Hits in 2021 to 2022 | Hits in 2020 to 2021 | Hits in 2019 to 2020 |
|---|---|---|---|
| Apr-21 | 27,005 | 30,848 | 43,963 |
| May-21 | 21,240 | 25,764 | 35,015 |
| Jun-21 | 15,731 | 18,200 | 31,747 |
| Jul-21 | 16,259 | 17,893 | 31,886 |
| Aug-21 | 17,267 | 16,943 | 32,027 |
| Sep-21 | 18,387 | 16,756 | 29,802 |
| Oct-21 | 20,232 | 18,111 | 32,751 |
| Nov-21 | 19,519 | 18,605 | 38,028 |
| Dec-21 | 18,577 | 17,710 | 26,227 |
| Jan-22 | 25,520 | 26,864 | 21,999 |
| Feb-22 | 21,323 | 27,149 | 22,793 |
| Mar-22 | 24,769 | 32,039 | 21,244 |
| Total | 245,829 | 266,882 | 367,482 |
Web hits for guidance: work out if you’ll pay SIT
| Month | Hits in 2021 to 2022 | Hits in 2020 to 2021 | Hits in 2019 to 2020 |
|---|---|---|---|
| Apr-21 | 551 | 440 | 961 |
| May-21 | 462 | 491 | 867 |
| Jun-21 | 425 | 467 | 824 |
| Jul-21 | 440 | 571 | 1018 |
| Aug-21 | 468 | 517 | 920 |
| Sep-21 | 465 | 545 | 787 |
| Oct-21 | 465 | 659 | 805 |
| Nov-21 | 454 | 590 | 825 |
| Dec-21 | 474 | 480 | 561 |
| Jan-22 | 679 | 736 | 661 |
| Feb-22 | 578 | 608 | 495 |
| Mar-22 | 488 | 682 | 410 |
| Total | 5,949 | 6,786 | 9,134 |
Web hits for Internal manual: SIT guidance
| Month | Hits in 2021 to 2022 | Hits in 2020 to 2021 | Hits in 2019 to 2020 |
|---|---|---|---|
| Apr-21 | 72 | 89 | 167 |
| May-21 | 76 | 60 | 121 |
| Jun-21 | 73 | 70 | 176 |
| Jul-21 | 62 | 71 | 207 |
| Aug-21 | 49 | 83 | 175 |
| Sep-21 | 85 | 98 | 165 |
| Oct-21 | 85 | 86 | 170 |
| Nov-21 | 46 | 67 | 165 |
| Dec-21 | 75 | 84 | 124 |
| Jan-22 | 88 | 94 | 182 |
| Feb-22 | 63 | 120 | 254 |
| Mar-22 | 73 | 91 | 77 |
| Total | 847 | 1,013 | 1,983 |
Web hits for Tell HMRC about a change in personal details
| Month | Hits in 2021 to 2022 | Hits in 2020 to 2021 | Hits in 2019 to 2020 |
|---|---|---|---|
| Apr-21 | 134,454 | 137,097 | 180,209 |
| May-21 | 103,601 | 132,396 | 179,413 |
| Jun-21 | 102,811 | 116,678 | 149,142 |
| Jul-21 | 107,504 | 112,211 | 169,000 |
| Aug-21 | 110,006 | 107,018 | 165,589 |
| Sep-21 | 114,398 | 109,312 | 161,188 |
| Oct-21 | 111,290 | 117,571 | 161,645 |
| Nov-21 | 110,711 | 130,252 | 142,601 |
| Dec-21 | 85,393 | 108,887 | 93,810 |
| Jan-22 | 123,294 | 147,275 | 109,261 |
| Feb-22 | 108,787 | 142,721 | 101,372 |
| Mar-22 | 119,818 | 169,290 | 113,309 |
| Total | 1,332,067 | 1,530,708 | 1,726,539 |