Auditor warns Revenue Scotland may not have expertise in place to function effectively

Delays in staff recruitment along with slow IT system procurement leave Scotland's new tax authority at risk of lacking the skills necessary to function, according to Audit Scotland.

The public finance watchdog has recommended that Revenue Scotland – the body responsible for administering Land and Buildings Transaction Tax and Landfill Tax – should clarify what progress needs to be made in recruitment for key posts and to ensure the IT system is operational for April 2015.

But the report also puts the estimated set-up costs for the new Scottish rates of income tax – which will be controlled by the Scottish Parliament from 2016 – at £35-40m, around £10m lower than the initial estimation.

The report says: “The staff required to manage the overall programme were not in place early enough. There were also delays in procuring the IT system to collect and administer the taxes. These delays have reduced the time available to develop the IT system and appoint staff.

“As a result, there is increased risk that the IT system may not be fully operational by 1 April 2015 and that Revenue Scotland may not have the expertise to manage the devolved taxes effectively from 1 April 2015. In recognition of the reduced time available, Revenue Scotland is developing contingency plans.”

The Auditor warned that if Revenue Scotland is not fully operational for April there could be a delay in processing tax payments and higher costs of collection.

Caroline Gardner, Auditor General for Scotland, said: “The implementation of the Scotland Act 2012 is a large and complex task that will change the landscape for public finances in Scotland, increasing fiscal autonomy and strengthening the accountability of the Scottish Parliament.

“The Scottish Government successfully developed the legislative framework for the devolved taxes, but it must ensure that staff and systems are fully in place to manage the increased responsibilities that the Scotland Act brings.”