Official Statistics

Scottish VAT Assignment 2023 - Official Statistics in Development

Updated 18 December 2025

The latest release was published 09:30 18 December 2025. The next release will be published at a date to be confirmed.

1. About this release

This publication on Value Added Tax (VAT) Assignment (VA) for Scotland is produced by HM Revenue and Customs (HMRC) with support from the Scottish Government. The statistics are Official Statistics in Development. They present an estimate of the first 10 percentage points (10p) of the standard rate of VAT raised in Scotland and the first 2.5 percentage points (2.5p) of reduced rated VAT raised in Scotland as an annual proportion of UK VAT receipts. This measure was recommended by The Smith Commission.

The first 10p of the standard rate of VAT and the first 2.5p of the reduced rate of VAT represent half of VAT receipts and therefore multiplying by 2 would give the approximate Scottish VAT share.

The VAT Assignment share calculation is based on a detailed model jointly developed by the UK and Scottish governments which considers how much VAT would be assigned to Scotland if it were a separate jurisdiction for VAT purposes considering expenditure in Scotland and the rest of the United Kingdom (rUK). VAT Assignment estimates for 2011 to 2022 were published on 14 November 2024.

This publication contains a first estimate for the Scottish VA share of UK VAT for 2023, the ratio of the VAT that would be assigned to Scotland compared with the VAT raised in the UK. It also presents a revised back series to 2012. Scottish VAT Assignment share estimates remain provisional to allow for revisions to the underlying data and methodology which are both subject to change.

2. Executive summary

In 2023, the Scottish VAT Assignment share outturn as a percentage of UK VAT receipts was 4.48%, down from 4.55% in 2022. For information on VAT liabilities and how this outturn is calculated, see Scottish VAT Assignment 2023 - supplementary information.)

Figure 1: Scottish VAT Assignment share of UK VAT receipts (%), 2012 to 2023

Figure 1 shows the Scottish VAT Assignment share for calendar years 2012 to 2023.

The Scottish VAT Assignment share has fluctuated between 4.07% and 4.58% during the period 2012 to 2023. The VAT Assignment share was lowest in 2020 at 4.07% due to COVID-19 effects and low domestic tourism expenditure in Scotland compared to the rest of the UK. The VAT Assignment share recovered in 2021 and 2022, mostly driven by recoveries in domestic tourism expenditure in Scotland, and growth in household expenditure.

Across the rest of the time series, fluctuations in VAT Assignment share are mostly driven by changes in household expenditure, which is the largest expenditure sector of the model.

3. Model results and commentary

Table 1 presents Scottish VAT Assignment share figures from Figure 1, UK VAT receipts, and estimated Scottish VAT values.

From 2012 to 2023, Scotland’s estimated share of UK VAT ranged between 4.25% and 4.58%, except in 2020 when it dropped to 4.07% due to COVID-19. The corresponding cash values are shown as illustrative figures in the table.

Table 1: Estimated Scottish VAT Assignment share of UK VAT compared to UK VAT Receipts, 2012 to 2023

Calendar year	VAT Assignment share (percentage)	VAT receipts (£ million)	Illustrative VAT Assignment share (£ million)
2012	4.51	100,572	4,533
2013	4.50	104,718	4,710
2014	4.36	111,363	4,856
2015	4.33	114,941	4,973
2016	4.25	119,799	5,091
2017	4.58	126,423	5,790
2018	4.42	132,540	5,864
2019	4.30	134,862	5,803
2020	4.07	118,968	4,843
2021	4.30	135,251	5,812
2022	4.55	159,747	7,264
2023	4.48	168,389	7,537

Figure 2: Breakdown of the year-on-year change in Scottish VAT Assignment share of UK VAT Assignment by Scottish VAT Assignment model components 2012 to 2023

Figure 2 shows how the change in the VAT Assignment share over time is driven by changes in each of the expenditure components (note that the vertical axis only ranges over 1 percentage point):

• between 2012 to 2019, the VAT Assignment share generally tracked household sector changes (the largest sector covering circa 70% of activity), except in 2015 where its contributions to growth was under 0.02%

• from 2020 to 2023, domestic tourism becomes more prevalent. The domestic tourism VAT Assignment share decreased by 0.25 percentage points in 2020, then increased by 0.07 in 2021 and 0.09 in 2022 as COVID-19 restrictions eased. From 2023, the domestic tourism VAT Assignment share has reduced by 0.01 percentage point

• in 2023, the household sector accounts for the majority of the change in the VAT Assignment share

Underlying data for Figure 2 can be found in Table 3 of the accompanying Excel data.

Growth in the illustrative £ million VAT Assignment figures

Figure 3: Percentage growth in the illustrative VAT Assignment cash share

Figure 3 presents the relationship between growth in the cash estimates for the VAT Assignment share, growth in overall UK VAT receipts, and changes in the VAT Assignment share estimated by the model. In most years growth the UK VAT receipts has been an important driver.

• UK VAT receipts decreased by 12% in 2020, which is attributed to the effects of the COVID-19 pandemic.
• overall, UK VAT receipts rose by 5% in 2023, following an 18% increase in 2022, which in itself increased by 14% compared to 2021.

Underlying data for Figure 3 can be found in Table 4 of the accompanying Excel data.

4. Revisions from previous estimates

The Scottish VAT Assignment share has been revised annually in line with updates to National Accounts aggregates. The 2023 publication shows larger changes in the back series due to methodological changes.

Table 2 shows the revisions to the VAT Assignment share from 2012 to 2022 ranged between -0.01 and 0.13 percentage points, compared to –0.14 to 0.01 percentages points in the 2022 release.

Table 2: Revisions to VAT Assignment share (percentage point) and illustrative VAT Assignment figures (£ million)

Calendar year	Revisions to VAT Assignment share (percentage point change)	Illustrative VAT Assignment figures (£ millions)
2012	-0.04	-40
2013	-0.06	-63
2014	-0.05	-56
2015	-0.03	-34
2016	0.02	24
2017	0.02	25
2018	-0.01	-13
2019	-0.04	-54
2020	0.07	83
2021	0.05	68
2022	0.13	208

5. What components of the model are driving movements in the Scottish VAT Assignment share over time?

Figure 4: Scottish share of UK household expenditure: LCF Survey versus VAT Assignment model

Figure 4 shows how the change in the household sector of the VAT Assignment model over time is driven by changes in the Living Costs and Food (LCF) Survey:

• the Scottish share of expenditure based on the LCF changes broadly in line with the year-on-year changes to the household sector (the largest sector covering 70% of activity, which the LCF feeds into)

• in 2022, the Scottish share of the household sector fell by 0.24 percentage points relative to rUK, and in 2023 it fell by 0.25 percentage points

Underlying data for Figure 4 can be found in Table 5 of the accompanying Excel data.

Living Cost and Food Survey and Standard Rate Equivalent (SRE) expenditure

The household sector is significant due to its large share of total expenditure. Figure 4 compares Scotland’s share of UK household spending from the Living Cost and Food (LCF) Survey with its Standard Rate Equivalent (SRE) share derived using the VAT (VA) model. SRE adjusts expenditure shares for differing VAT rates, while LCF provides raw data.

The VAT Assignment model focuses on VAT-liable categories and converts them into SRE values, using LCF as one of several data sources. Figure 4 shows that the Scottish SRE share of the UK SRE household expenditure from the VAT Assignment model follows a similar trend as the Scottish share of total UK expenditure based on the LCF, with a notable dip in 2016 and 2020.

The changes in the Scottish share of UK total expenditure depicted by the LCF indicate that the underlying LCF data is largely driving the changes in the Scottish household share in the VAT Assignment model, which subsequently is driving the VAT Assignment share for non-COVID-19 years (2012 to 2019).

6. Caveats

1. It is not possible to directly measure VAT raised in Scotland as the information collected from businesses through VAT returns does not specify the UK region of consumption. The share has been estimated using the Scottish VAT Assignment model, jointly developed by officials from UK government and Scottish government.

2. The data sources used in the VAT Assignment model include a variety of survey data affected by COVID-19 with the introduction of stay-at-home measures in March 2020 affecting data collection and other elements. For survey sources where data is available, expenditure may also reflect behavioural changes linked to COVID-19. For more information on the data sources affected, see ‘methodology’ in the ‘Background and methodology’ report.

7. Contacts and feedback

Produced by the Scottish VAT Assignment team, as part of the ‘Devolved Taxes’ collection.

We welcome queries and user feedback on this publication.

If you have any feedback, questions or comments about this publication, please email it to:

modelscottishvatassignment@hmrc.gov.uk

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