The Scottish government has set out four alternative proposals for new Scottish income tax rates and bands in a discussion document to inform how the government should use its new income tax powers in the forthcoming Scottish Budget on 14 December.
The Scottish government has set out four alternative proposals for new Scottish income tax rates and bands in a discussion document to inform how the government should use its new income tax powers in the forthcoming Scottish Budget on 14 December. The discussion paper, ‘The role of income tax in Scotland’s Budget’, contains a comparison of the income tax policies put forward by all the main Scottish parties. The proposals are:
Announcing publication of the paper, Scottish finance secretary Derek Mackay said: ‘I am seeking a well-informed and considered debate on the use of our powers, recognising that in a parliament of minorities common ground on tax must be found to secure a budget for Scotland. We have therefore set out alternative approaches for discussion, that we believe could better meet the four tests we have established.’ These four tests are:
Moira Kelly, chair of the CIOT Scottish technical committee, commented: ‘Even if a political consensus emerges in favour of major changes to income tax in Scotland, these policy decisions cannot be considered in isolation from the wider UK tax regime.’
‘A markedly different income tax regime north of the border may, for example, incentivise self-employed businesses to incorporate in order to shift their liabilities from higher rates of Scottish income tax to lower rates of UK-wide corporation and dividend taxes,’ Kelly suggested.
‘Similarly, in the case of very high earners, it shouldn’t be ruled out that those people could choose to relocate to other parts of the UK or elsewhere if significant amounts of tax were at stake.’
The Scottish government has set out four alternative proposals for new Scottish income tax rates and bands in a discussion document to inform how the government should use its new income tax powers in the forthcoming Scottish Budget on 14 December.
The Scottish government has set out four alternative proposals for new Scottish income tax rates and bands in a discussion document to inform how the government should use its new income tax powers in the forthcoming Scottish Budget on 14 December. The discussion paper, ‘The role of income tax in Scotland’s Budget’, contains a comparison of the income tax policies put forward by all the main Scottish parties. The proposals are:
Announcing publication of the paper, Scottish finance secretary Derek Mackay said: ‘I am seeking a well-informed and considered debate on the use of our powers, recognising that in a parliament of minorities common ground on tax must be found to secure a budget for Scotland. We have therefore set out alternative approaches for discussion, that we believe could better meet the four tests we have established.’ These four tests are:
Moira Kelly, chair of the CIOT Scottish technical committee, commented: ‘Even if a political consensus emerges in favour of major changes to income tax in Scotland, these policy decisions cannot be considered in isolation from the wider UK tax regime.’
‘A markedly different income tax regime north of the border may, for example, incentivise self-employed businesses to incorporate in order to shift their liabilities from higher rates of Scottish income tax to lower rates of UK-wide corporation and dividend taxes,’ Kelly suggested.
‘Similarly, in the case of very high earners, it shouldn’t be ruled out that those people could choose to relocate to other parts of the UK or elsewhere if significant amounts of tax were at stake.’