What we forecast

We produce independent forecasts on devolved tax revenues and social security expenditure to help determine the Scottish Government's budget

 

What we currently forecast

Income tax powers devolved to the Scottish Parliament covers all non-savings non-dividend (NSND) income from Scottish taxpayers.

NSND income tax forecast – May 2019

£ million 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
  10,719 11,005 11,486 11,703 12,332 12,831 13,374 13,985 14,613

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LBTT is paid on the purchase of property and land, it was introduced in April 2015. The three components of LBTT are residential, non-residential (commercial) and the Additional Dwelling Supplement (ADS). ADS is payable on additional properties such as second homes or buy-to-lets.

LBTT forecast - May 2019

£ million 2017-18 [1] 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Residential 258 262 279 310 336 359 382 405
ADS 95 98 126 127 131 134 138 141
Non-residential 204 193 211 218 224 231 239 248

[1] 2017-18 values are outturn available at time of publication.

Read more on residential or non-residential LBTT.

Non Domestic Rates (also called Business Rates) are paid by the owner, tenant or occupier of non-domestic properties.   

Non-domestic rates forecast – May 2019

 £ million 2017-18 [1]  2018-19   2019-20 2020-21  2021-22  2022-23   2023-24 2024-25
   2,762 2,885 2,803 2,853 3,090 3,301  3,338 3,318

[1] 2017-18 value is outturn available at time of publication.

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The Scotland Act 2016 devolved Air Passenger Duty (APD) to the Scottish Parliament; this is a tax paid on passengers flying from Scotland.

Scottish APD forecast – May 2019

£ million 2017-18  2018-19   2019-20 2020-21  2021-22   2022-23 2023-24  2024-25
   275  286  295  307  320  336  352 369

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Scottish Landfill Tax is the tax paid on the disposal of waste to landfill which was introduced from April 2015.

Scottish Landfill Tax forecast – May 2019

 £ million

2017-18 [1]

2018-19  2019-20   2020-21 2021-22 2022-23   2023-24 2024-25
   148  143  109  87  12  14  15 15

[1] 2017-18 value is outturn available at time of publication.

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We produced updated forecasts for the Scottish Economy in May 2019.

Onshore Scottish GDP growth forecast – May 2019

Per cent growth 

2018 [1]

2019  2020 2021  2022  2023   2024
   1.3  0.8  0.9  1.1  1.2  1.3  1.3

[1] 2018 value is outturm available at the time of publication.

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The Scotland Act 2016 devolved a number of social security benefits to Scotland. The transfer of powers to the Scottish Parliament has been completed for some benefits and is underway for others. Based on this process, we currently forecast expenditure on the following areas: 

You can find out here how our Social Security forecasts support Scotland's Budget process.

Regulations have been introduced in the Scottish Parliament to expand the remit of the Commission to include VAT forecasting to support VAT assignment.

VAT assignment forecast – May 2019

£ million 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
  5,012 5,361 5,514 5,707 5,879 6,043 6,205 6,369 6,571

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What we will forecast in the future

Aggregates Levy is the tax paid on the commercial exploitation of rock, sand and gravel.

Aggregates Levy will be devolved once current State Aid and other outstanding legal issues have been resolved.

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The Scottish Government will become responsible for more social security benefits from April 2020. Some of these will initially be administered by the Department for Work and Pensions (DWP) on the Scottish Government's behalf. We will forecast spending on the benefits while they continue to be administered by DWP and also once Social Security Scotland launches the devolved equivalent. The Scottish Government's plans for when Social Security Scotland will accept new claims for each of the benefits are shown below. The timescales for when existing recipients will transfer to Social Security Scotland is longer and not expected to complete until 2024.

Source: Scottish Government (2019) Delivery of devolved Social Security benefits: Stakeholder Toolkit (link)

[1] Winter Heating Assisitance for serverly disabled children will be introduced as part of Disabilitiy Assistance, by the end of 2020.

 

What we assess

The Commission is required to assess the reasonableness of the Scottish Government's projections of its borrowing. We fulfil this role by assessing any borrowing which Ministers can project in advance.

Our assessment of reasonableness will consider the level of borrowing relative to the statutory caps set out in the Scotland Act 2016 and the associated fiscal framework. Where appropriate, we will also consider how broader fiscal factors may affect the resources available to the Scottish Government. For example, we examine the payments into, and draw down of funds from, the Scotland Reserve. We will continue to review the scope of this assessment and our commentary on broader fiscal factors will expand in future publications whenever we consider there to be a public benefit.

You can find out more about our latest assessment of the Scottisah Government's borrowing projections in our report, Scotland's Economic and Fiscal Forecasts.