Preparations for the implementation of the Scotland Act 2012 
Podcast script – December 11 2014 
I’m speaking today with Rebecca Seidel, project manager on our latest report, Preparations for the implementation of the Scotland Act 2012. 
Rebecca, can you tell me what is this report about? 
This report assesses the Scottish Government's progress in preparing for the financial measures in the Scotland Act 2012. It focuses on preparation for administering and collecting two devolved taxes which will replace stamp duty and the UK landfill tax from April next year.
The report also looks at preparations for introducing the Scottish Rate of Income Tax in April 2016 and it looks at what the Scottish Government is doing to manage these new financial powers.
And what have you found? 
The Scottish Government established clear structures for managing the set-up of the new tax authority, Revenue Scotland, and there are well-developed plans for implementing the devolved taxes. But the staff needed to manage the overall programme were not in place early enough, and there have been delays in procuring the IT system to collect and administer the devolved taxes.
This has reduced the time available to develop the IT system and to appoint staff to Revenue Scotland, and it's increased the risk to the effective management of the devolved taxes when they come into force next year. 
Now with regards to this increased risk, can you tell us a bit more about the difficulties that that could create for Revenue Scotland moving forward?
We found that there have been delays in putting the required staff in place to manage preparations for the devolved taxes and in procuring the IT system to collect and administer these taxes. This has reduced the time available to develop the IT system and to appoint staff to Revenue Scotland, and as a result of that there's an increased risk that the IT system may not be fully operational by 1 April 2015 and that Revenue Scotland may not have the required expertise in place to manage the devolved taxes effectively when they come into force. 
This could result in tax payments taking longer to process and it could also lead to an increase in processing costs.
So what are you recommending happens next? 
We're recommending that Revenue Scotland closely monitors recruitment to its operational team and the development of the IT system. This will allow them to decide whether they need to implement their contingency plans to make sure that they're in a position to effectively manage the devolved taxes from 1 April next year.
What work will Audit Scotland be carrying out in the future in relation to the Scotland Act?
The Scottish Rate of Income Tax will be introduced in April 2016 and our report provides some initial observations on the progress towards implementing this. We found that the Scottish Government is working closely with HMRC to prepare for the Scottish Rate of Income Tax.
We recommend that the Scottish Government ensures it has enough appropriately skilled people in place to support the successful implementation of the Scottish Rate of Income Tax in April 2016, and we intend to do further work in this area.
The new financial powers that the Scotland Act 2012 introduces make the need for transparent financial reporting even more important, and we'll be publishing an update on the progress the Scottish Government is making in this area early next year. 
How does the work of the Smith Commission sit alongside any future work that Audit Scotland may carry out in this area?
The Smith Commission has recommended further powers for the Scottish Parliament, including full control over Income Tax rates and bands on earned income and this has important implications for Scotland's public finances so it's an area that we will continue to keep under review.
Rebecca, thank you.