Modernising Revenue Scotland’s tax administration framework: communications from Revenue Scotland to taxpayers

Challenges and Issues with current arrangements

Revenue Scotland has highlighted concerns that the arrangements discussed above are resource intensive, costly and create uncertainty as to whether the correspondence can be said to have been received.  More specifically:

Revenue Scotland can only serve documents by electronic communications where there is prior written consent of the taxpayer. There is uncertainty around how such consent (in relation for instance to its form, duration and withdrawal) can be evidenced. Revenue Scotland’s current practice is to ask taxpayers to complete a written disclaimer confirming consent to use of electronic communications.

• The requirement to have consent to electronic communications also causes delay and often results in additional, resource intensive, postal communications between Revenue Scotland and taxpayers before the email disclaimer is in place. 
• Even where there is consent, the legislation does not provide certainty around whether the use of electronic communications is restricted to email communications or would also encompass the use of an online portal such as SETS. 
• Where service is by recorded delivery/signed for post, there is a cost impact on Revenue Scotland and risks both that taxpayers may either refuse to accept the correspondence or may not be home to allow for it to be delivered.  
• In the case of delivery by ordinary post, legislative gaps create uncertainty around whether a taxpayer can be said to have received the correspondence and around the time of receipt. 
• Delivery by post is also slower relative to the use of electronic means, and taxpayers will need to retain their physical letter or notice to refer to the information when needed.

On the issue of cost, for example, if Revenue Scotland were to seek to resolve the uncertainties around consent to electronic communications and receipt of ordinary post by serving all formal notices by recorded delivery/Signed For post, the anticipated total postal budget required for the current financial year would be expected to increase by over 330%.  

Risk of error and uncertainty

The Scottish Government recognises that there are various risks that would need to be considered and addressed in relation to a digital by default approach.

Electronic communications may, for example, be issued to an incorrect or out of date email address, which could lead to the taxpayer not receiving the communication and inadvertent disclosure of protected taxpayer information.

Another risk is that electronic communications may not be received by the taxpayer, either because they did not open the communication, it was not dispatched by Revenue Scotland’s servers or there is a service interruption. Alternatively, a taxpayer may experience difficult life events meaning that they cannot interact with, or appreciate the significance of, the electronic communication that they receive at that point.

Additionally, where the taxpayer has engaged a representative, there may be confusion as to who was responsible for dealing with any communication; or there may be confusion about the distinction between a formal notice and further correspondence which re-attaches that formal notice. A taxpayer may not also treat correspondence from Revenue Scotland as genuine.

Although these risks apply, in a different context, to the current use of postal communications, the Scottish Government recognises that they will need to be considered fully in relation to any change. This could include consideration of the extent to which, for example, Revenue Scotland could make use of technologies which alert it if an electronic communication is not opened within a specified period after the communication has been transmitted.

Opportunities and benefits

Introducing a presumption of receipt of service by ordinary post would align more clearly with the legal presumptions that apply for service by recorded or registered post. It would also:

• help to resolve uncertainty around whether a taxpayer can be said to have received correspondence sent by ordinary post; and the time of receipt. 
• result in cost savings for Revenue Scotland, as the use of ordinary post is cheaper and more efficient.
• make it easier for the taxpayer to receive such communications (as opposed to service by recorded delivery/Signed For post) as the taxpayer will not have to be physically present at the address to receive service or make arrangements to collect the mail. 

Risks and challenges

As is the case for electronic communications, there are various risks and other issues which would need to be properly considered. For example:

• postal communications may be issued to an incorrect postal address, which could lead to a taxpayer not receiving the communication and an accidental disclosure of protected taxpayer information. 
• delivery of postal communications may be delayed for several reasons including strikes, severe weather and system delays.