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Scottish income tax powers

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HMRC has published a technical note containing a set of draft regulations making consequential amendments to areas of income tax, such as gift aid, relief-at-source pensions and certain trust and estate income, which reference rates other than the basic rate. The purpose of the regulations is to allow the operation of these areas to remain unchanged, should the Scottish Parliament move away from the current structure involving basic, higher and additional rate bands, following the devolution of income tax powers after April 2017.

In February 2016 the Scottish Parliament set the Scottish rate at 10% for the 2016/17 tax year, meaning that the Scottish basic, higher and additional rates applicable to Scottish taxpayers were the same as rates applicable to taxpayers elsewhere in the UK.

The Scotland Act 2016 devolves further income tax power to the Scottish Parliament, allowing it full flexibility over the income tax rates and limits applicable to Scottish taxpayers. The further income tax powers commence on 6 April 2017 and the Scottish Government will announce its proposed rates and limits for the 2017/18 tax year in their draft budget on 15 December 2016.

Comments on the technical note or the draft Scotland Act 2016 (Income Tax Consequential Amendments) Regulations 2016 should be sent by 31 December 2016. See

Issue: 1335
Categories: News