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Scottish government consults on tax policy framework

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The Scottish government is consulting until 6 June 2019 on a new approach to the process of legislating for changes to the fully-devolved taxes in Scotland, including whether there should be a Scottish Finance Bill.

The proposed ‘devolved taxes policy framework’, covers changes to land and buildings transaction tax (LBTT) and Scottish landfill tax (SLfT). Other than the Scottish Budget, there is no formal process in place to guide the development and implementation of legislative change for these taxes.

Air passenger duty and aggregates levy remain reserved taxes for the time being, although the UK and Scottish governments remain committed to devolving these taxes to Scotland once state aid issues are resolved.

In its June 2017 report, the Budget process review group made a number of recommendations, including two in relation to the fully devolved taxes:

  • explore options for alternative legislative processes for devolved taxes legislation, particularly where tax measures need to be introduced quickly or where minor amendments are needed to existing primary legislation; and
  • examine the need for a Finance Bill and bring forward any recommendations by the end of the current Parliament.

The new framework will set out a policy and legislative cycle for changes to devolved taxes legislation, through which the Scottish government aims to ensure:

  • its strategy and priorities in relation to tax are clear;
  • there is early and continuous consultation throughout the policy cycle;
  • stakeholders are encouraged to participate in the formulation of tax policy and given clarity around when and how they can make representations;
  • tax changes are announced sufficiently in advance of when they will take effect, providing taxpayers and practitioners with certainty; and
  • legislation is reviewed post-implementation.


Welcoming the consultation, Alexander Garden, chair of the CIOT’s Scottish technical committee, commented: ‘The increasing importance of the devolved taxes to the Scottish Budget means that the time is right to take stock of the first four years of their operation, consider how they have fared against the principles underpinning the Scottish approach to tax and ensure that the policy process is fit for purpose both now and in the future’.

‘We look forward to working with the Scottish Government, Scottish Parliament and others as part of this process’, Garden said on behalf of the CIOT.

Issue: 1436
Categories: News