Background to the report

The Scotland Act 2016 gave the Scottish Parliament power to determine the rates and thresholds (excluding the personal allowance) paid by Scottish taxpayers on all non-savings, non-dividend income from 6 April 2017. For 2021-22, the top rate tax band in Scotland stayed at £150,000. All other tax bands increased by between approximately 0.5% and 0.6%, similar to the increases for the rest of the UK. HM Revenue & Customs (HMRC) administers and collects Scottish income tax as part of the UK tax system.

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Following the end of each tax year, HMRC produces a provisional estimate of Scottish income tax revenue for that year. The final outturn is calculated the following year once HMRC receives further information from taxpayers and employers. This report covers the final outturn for 2020-21 and the provisional estimate for 2021-22.

Scope of the report

The NAO has statutory responsibilities for auditing HMRC’s collection of Scottish income tax. This report assesses:

  • HMRC’s calculation of the 2020-21 income tax revenue for Scotland, the ‘outturn’, and assurance on the correctness of amounts brought to account (Part One)
  • HMRC’s estimate of the 2021-22 income tax revenue for Scotland and our view on the estimate methodology (Part One)
  • key controls operated by HMRC to assess and collect income tax (Part Two)
  • HMRC’s approach to assessing and mitigating the risk of non-compliance with Scottish tax requirements (Part Two)
  • the cost of administering Scottish income tax. We provide assurance on the accuracy and fairness of these amounts in the context of costs incurred by HMRC (Part Three)


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