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Scottish taxes: consultations & devolution

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The Scottish government is consulting until 9 January 2015 (31 October 2014 in one instance) on draft Scottish statutory instruments giving effect to a range of powers contained in the Revenue Scotland and Tax Powers Act 2014, which received royal assent on 24 September 2014. The instruments are expected to come into force on 1 April 2015. The consultation document, Revenue Scotland and Tax Powers Act 2014: a consultation on proposed subordinate legislation, is available on the website.

The Scottish government is also consulting until 9 January 2015 on the rules for the new Scottish tax tribunals, established by the Revenue Scotland and Tax Powers Act 2014. The intention is, as far as possible, to mirror the UK tribunal rules.

Additionally, the Prime Minister announced that Lord Smith of Kelvin would oversee the process of taking forward the devolution commitments on further powers for the Scottish Parliament. According to Deloitte, the Smith Commission’s remit is to produce a set of proposals which will command cross-party support, with a view to draft legislation being published by 25 January and enactment before the general election. The Smith Commission has invited comment from the public and has published guidelines on what it will take into account in evaluating the suggestions received.

In response, the Scottish government stated it is seeking full autonomy for income tax, NICs, corporation tax, CGT, fuel duty, air passenger duty and IHT, amongst other proposals for devolution of powers to the Scottish Parliament. VAT and excise duties would be excepted, being subject to EU rules requiring uniformity across the UK. In its paper published on 10 October, More powers for the Scottish parliament, which contains proposals to inform the forthcoming Smith Commission on Scottish devolution, the Scottish government puts forward the principle that all taxes raised in Scotland should be the responsibility of the Scottish parliament, unless there are ‘good reasons’ for them being reserved to Westminster. As things stand, once the Scotland Act 2012 is fully implemented, the Scottish parliament will be responsible for around 16% of all taxes raised in Scotland.

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