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Dec 16, 2021 · Scotland's Framework for Tax sets out the principles and strategic objectives that underpin the Scottish Approach to Taxation, as well as our approach to decision making, engagement and how we manage and sequence tax policy and delivery.
- A Vision For Good Tax Policy Making
- What The Framework Does
- Expected Benefits
- Background
- Scottish Parliament
- Scottish Government
- Revenue Scotland and HMRC
- Local Authorities
- Scottish Fiscal Commission
- Tax Tribunals
Taxes form part of the fabric of society and we should all be proud of the contribution they make. They are a key component of the social contract. How we develop and deliver tax policy is therefore of high, and growing, importance to the Scottish Government. We have already taken significant steps to modernise the taxes that have been devolved to ...
The Framework broadly sets out the what, how, when and why in relation to our overall approach to tax policy making. One of the core aims is transparency. It is therefore designed to be accessible for the public and stakeholders alike. As far as possible, technical jargon is minimised or explained. 1. Chapter 1 provides background, setting out the ...
In creating a Framework for Tax, the Scottish Government is aiming to: 1. Be open and transparent about how we approach tax policy. Responding to the recommendations of the Citizens' Assembly, the Framework provides more information, in accessible language, on the purposes for collecting taxes; the principles that underpin our approach; our strateg...
Funding the Scottish Budget
The Scottish Budget is principally comprised of the Block Grant, pooled local tax revenues, net devolved tax revenues and additional funding for devolved social security powers. The overall funding position depends in large part on the operation of the Fiscal Framework. Graphic text below: Components One Barnett Formula Determined Block Grant - Components Two Deduction to reflect Ukg revenues forgone (BGA) + Components Two Addition to reflect Ukg social security expenditure no longer incurred...
Scotland's Devolved Taxes
The Scottish Parliament has limited powers when it comes to taxation. Under the current devolution settlement, the vast majority of tax powers remain reserved to the UKGovernment and Parliament. This, together with the operation of the Fiscal Framework, constrains what the Scottish Government can do in relation to tax policy. The Scottish Parliament currently has devolved responsibilities in relation to five taxes: 1. Scottish Income Tax is partially devolved – the Scottish Parliament is able...
The Fiscal Framework
The funding arrangements agreed mean that Scotland's budget position improves if tax receipts per head grow more quickly in Scotland than in rUK(and vice versa). However, there are a number of factors which can affect Scotland's relative tax performance, including: 1. Growth in earnings, pensions, property income and house prices; 2. Growth in the number of taxpayers or taxable transactions; 3. Differences in the composition of the tax base; 4. Policy changes and resulting changes to taxpayer...
All devolved and local tax powers operate based on the consent of the Scottish Parliament. Any changes to existing taxes, or the introduction of new taxes, will require the agreement of the Scottish Parliament to have effect. This is achieved through legislation (either primary or secondary). Through the Scottish Parliament's Finance and Public Adm...
The Scottish Government is responsible for the setting and developing devolved tax policy in Scotland. This includes changes to rates and bands of existing taxes; structural changes to the way a tax is designed; the introduction of new taxes such as a new local tax; and significantly reforming existing devolved tax powers. Changes can be announced ...
Revenue Scotland is responsible for the administration and collection of the fully devolved taxes in Scotland and HMRCfor the devolved aspect of Scottish income tax. Tax authorities play a critical role in delivery, principally in relation to collection and administration, as well as providing a rich source of knowledge and expertise to inform poli...
Local Authorities in Scotland are responsible for the collection and administration of local taxation, most notably Council Tax and Non-Domestic Rates. They also set Council Tax rates annually and administer the Council Tax Reduction scheme, which supports lower-income households. Much like Revenue Scotland and HMRC, they play a crucial role as tax...
The Scottish Fiscal Commission (SFC) is an independent statutory body, directly accountable to the Scottish Parliament, that produces official fiscal and economic forecasts twice every financial year. The Scottish Government uses those forecasts to inform the Scottish budget and its financial planning. When the Scottish Government publishes its Bud...
The First-tier Tribunal for Scotland decides on disputes relating to Land and Buildings Transaction Tax and Scottish Landfill Tax. The Upper Tribunal can and does hear appeals on decisions of the First-tier Tribunal. In turn, decisions of the Upper Tribunal may be appealed to the Court of Session and, ultimately, the Supreme Court.
This consultation seeks views on our overarching approach to tax policy, through Scotland’s first Framework for Tax, and how the Scottish Government should use its devolved and local tax powers as part of the Scottish Budget 2022-23.
The Scottish Government is responsible for all aspects of devolved tax policy and legislation, including the setting of tax rates and bands. It is the Scottish Government’s role to bring forward legislation that is informed by Revenue Scotland’s expertise and experience of collecting and managing devolved taxes.
Since tax operations began on 1 April 2015, Revenue Scotland and the Scottish Government have worked in partnership to develop and maintain an efficient and effective tax system for Scotland. The guiding principles of this partnership are set out in the Working Together on Tax document.
Aug 12, 2021 · The Scotland Act 2016 introduced new income tax powers for the Scottish Parliament, which came into effect for the 2017-18 tax year. The new powers allow the Scottish Parliament to set rates and bands for non-savings, non-dividend (NSND) income tax. These powers have remained in place since 2017-18.
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Aug 12, 2021 · This briefing looks at how these powers have been used to develop income tax policy in Scotland. It also considers the impact these changes have had on the resources available for the Scottish budget and the impact on individual taxpayers and households.
