Scotland Bill and Income Tax

  The Scotland Bill is progressing through Parliament, currently it is at its committee stages, and with it comes amendments. Interestingly, one major amendment is a proposal that the Scottish Parliament will be able to set different rates of tax rather than one single rate of tax as originally intended.

The requirement that a Scottish rate resolution specifies only one rate has been omitted and replaces the power of the Scottish Parliament to set, by resolution, a basic rate of Income Tax and any other rates of Income Tax. The amended Bill also provides that the Scottish Parliament must set out the limits at which those rates apply or make other provision.

In other words, the Scottish Parliament must set out, not only the rates but also the bands for each rate. This is significantly different to the original proposals.