Costs of devolved tax systems are reasonable

HMRC’s calculation of Scottish income tax revenue for 2017-18 as £10 916m was fairly stated according to the National Audit Office (NAO). However its report Administration of Scottish income tax 2018-19 considered that the governance arrangements could be enhanced by formalising the full detail of the methodology in a single document that is ratified by all parties with any subsequent changes subject to approval by the Scottish Income Tax Board. This would support understanding of the process strengthen the governance around changes to the methodology and form a baseline position from which future refinements could be made.

On HMRC’s estimate that Scottish income tax revenue for 2018-19 will be £11 660m the report notes that the methodology HMRC used to produce this was largely consistent with the previous year but that it includes an adjustment to reflect potential overestimation in the underlying methodology. The NAO...