ICAS and the Law Society of Scotland urge proactive reform from new Tax Advisory Group

The Institute of Chartered Accountants of Scotland (ICAS) and the Law Society of Scotland have urged the Scottish Government’s new Tax Advisory Group to pursue a proactive reform agenda.

In a joint letter to the Scottish Government, the two organisations have stressed the need for greater public awareness and accessible public information about how devolved taxes work and sit alongside UK taxes.

They’ve also highlighted the importance of adequate resourcing for Scotland’s Tax and Revenues Directorate as essential to ensure the effectiveness of the tax system in Scotland and to allow for thorough tax policy reform and planning.

Isobel d’Inverno, Convener of the Law Society of Scotland’s Tax Committee, said: “There are many challenges facing the tax system in Scotland currently, including a lack of public awareness around the devolved tax system, the sustainability of the taxpayer base and the resources available to government to ensure the efficacy of the tax system.

“Yet our devolved tax system offers the opportunity to engage, to raise awareness and anticipate practical challenges. We have seen this approach used successfully before with the Devolved Taxes Legislative Working Group. For practitioners, an annual Scottish Government Tax Conference could be established, similar to what’s held by the Welsh Government. For the public, an online tax forum for taxpayers to post questions could resolve many common issues.”

Justine Riccomini, Head of Tax (Employment & Devolved Taxes) at ICAS, said: “We hope that the group will consider the proposed council tax structure, along with a review of business rates which is already set out in the Tax Advisory Group Terms of Business. A consultation was launched on 12 July by the Scottish Government and COSLA which looks at the higher bands of council tax.

“Local tax policy is fully devolved. Council tax and business rates, in addition to the LBTT structure, all need to be carefully balanced to attract both inward property and business investment into Scotland. A successful tax policy makes Scotland attractive to middle and higher earners, who in turn would increase the size and shape of the Scottish tax base.”

• The Scottish Government Tax Advisory Group was established by the Deputy First Minister Shona Robison in June 2023.
• The ICAS and Law Society of Scotland joint letter to the Scottish Government Tax Advisory Group is available online on the ICAS website and Law Society of Scotland website.