ICAS responds to Modernising Revenue Scotland’s tax administration consultation

Learn why we call for a balanced approach to digital communications, aligned with a long-term digital roadmap for Scotland, in our response to consultation on Modernising Revenue Scotland’s tax administration.

We responded to the Scottish Government’s consultation on modernising Revenue Scotland’s tax administration framework, focusing particularly on the proposed shift towards electronic communications.

While we broadly support digital transformation, we emphasised that changes must be grounded in accessibility, clarity and taxpayer trust. We also highlighted the need to align with a long-term roadmap for digital tax services in Scotland.

Digital by default, with safeguards

We recognise that moving to electronic communications by default could improve efficiency and reduce administrative burdens. However, this must be accompanied by robust opt-out provisions and protections for digitally excluded taxpayers.

Digital services should be designed to encourage voluntary uptake, rather than create a two-tier system where non-digital users are disadvantaged. Clear advance communication and simple opt-out mechanisms will be critical to ensuring fairness.

Building taxpayer trust

A key theme of our response is the need for a “taxpayer trust” approach to digitalisation. We highlighted that user-friendly systems, secure handling of data, and transparent communication about how information is used are all essential to building confidence.

We also noted that the current SETS (Scottish Electronic Tax System) platform presents usability challenges, underlining the need to improve system design alongside introducing new communication methods.

Addressing delivery and evidence risks

We also raised concerns about proposals to treat electronic communications as received on the day they are sent. Practical issues such as email failures, outdated contact details or cybersecurity risks could have significant consequences where tax liabilities or penalties are at stake.

We therefore call for clear and accessible processes that allow taxpayers to challenge presumed delivery, supported by monitoring systems to identify undelivered or unopened communications.

Providing clarity and security

While we support flexibility in the definition of electronic communications, we cautioned  against uncertainty around how Revenue Scotland will contact taxpayers.

Greater clarity would help mitigate risks of phishing and fraud which may increase as digital interaction expands. Taxpayers and agents should understand how and where to expect communications from Revenue Scotland. We therefore recommended clear guidance on official channels as part of a secure framework.

Maintaining non-digital options

We agree that paper correspondence must remain an alternative for those unable or unwilling to engage digitally.

We also recommend using recorded delivery for high-priority communications where appropriate to help ensure receipt.

Alignment and future strategy

We support alignment with HMRC practices where possible, as greater consistency across tax administrations can reduce confusion for taxpayers and agents. However, we recognise that Scotland’s more transactional taxes, such as Land and Buildings Transaction Tax (LBTT), present distinct challenges compared to ongoing compliance regimes.

Our response also highlighted the opportunity for Revenue Scotland and the Scottish Government to develop a broader digital tax strategy, ensuring that changes to communications form part of a coherent long-term roadmap. 

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