Property Sales Tax Fails To Meet Scottish Government Forecast, Report Reveals
26 September 2017, 05:21
Taxes from property sales in Scotland raised almost £55 million less than the Scottish Government's estimate, a new report has revealed.
Tax collectors at Revenue Scotland netted almost £483.6 million from the Land and Buildings Transaction Tax (LBTT) in 2016-17 - but in the budget for that year the Scottish Government had forecast £538 million.
Overall ministers had anticipated collecting £671 million from the two devolved taxes - LBTT and Scottish Landfill tax.
But figures in Revenue Scotland's annual report showed just over £633 million was collected in 2016-17.
It made clear that "Revenue Scotland is not responsible for the forecasting of expected tax revenues", saying Scottish Ministers were responsible for preparing revenue forecasts for devolved taxes in 2016-17, although independent forecasts will be done by the Scottish Fiscal Commission from 2017-18 onwards.
In the two years since it has been established, Revenue Scotland has collected more than £1 billion from the two devolved taxes.
The figures for 2016-17 also showed these raised £61 million more than the previous year.
Finance Secretary Derek Mackay said: "Revenue Scotland has continued to operate effectively and efficiently, with operating costs lower than last year and more than £1 billion of tax collected over its first two years of operation.
"The report indicates that £633 million was collected across the fully devolved taxes in 2016-17. That revenue has helped to fund our vital public services and support our ambition to create a more successful country, with opportunity for all to flourish through increased sustainable economic growth."
Revenue Scotland chairman Dr Keith Nicholson said: "The total tax collected in 2016-17 shows an increase of over 10% compared to our first operating year, contributing even more to Scotland's public services."
"An important milestone was also reached, with the amount of tax collected by Revenue Scotland in its first two years of operating exceeding £1bn. The total transferred to the Scottish Consolidated Fund between 1 April 2015, when operations began, and 31 March 2017 was £1.15bn."
A Scottish Government spokesman said: "A total of £633 million was collected in 2016-17, which represents £61 million more in income - a rise of 10% - than was delivered in the previous financial year.
"Transaction taxes are notoriously difficult to predict. Non-residential LBTT is volatile and strongly influenced by a few large transactions and wider economic uncertainty in the UK economy.
"The Office for Budget Responsibility's forecasts for residential and non-residential Stamp Duty Land Tax were also optimistic for 2016-17 reflecting similarly changing market conditions in the rest of the UK.
"As the Chancellor admitted today, Brexit is causing economic uncertainty right across the UK.
"This coupled with the downturn in the oil and gas sector in the North East has had an impact on Scotland's housing market and ultimately LBTT revenues.
"As the Finance Secretary said in June, the £74 million surplus from tax receipts from 2015/16 would be held in reserve and be available to address any shortfalls in tax receipts.
"It should also be noted that, across 2015-16 and 2016-17 combined, the difference between forecast and actual revenue raised was just 3%."