Source · Select Committees · Scottish Affairs Committee
1st report – The financing of the Scottish Government
Scottish Affairs Committee
HC 456
Published 16 July 2025
Recommendations
19
Not Addressed
Explain feasibility of VAT revenue assignment and update on implementation progress by 2026
Recommendation
We call on the UK Government, in its response to this report, to explain why it thinks the assignment of VAT revenues is still possible, despite robust views to the contrary, and whether the Scottish Government shares this position. We …
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Government Response Summary
The government stated that HM Treasury will continue to work with the Scottish Government to deliver Smith Commission recommendations, including VAT Assignment, but did not explain why it thinks assignment is possible or commit to a 2026 update as requested.
Scotland Office
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Conclusions (1)
18
Conclusion
Not Addressed
It seems highly unlikely to us that the assignment of VAT revenues will ever come into force. It is clear that implementing the assignment poses a significant challenge, and given the amount of time that has passed since the change was due to come into force, it is far from …
Government Response Summary
The government acknowledged continuing work on Smith Commission recommendations, including VAT Assignment, but did not directly address the committee's conclusion that its implementation seems highly unlikely and unrealistic.