Scotland Bill published

29 May 2015

The substantial new powers contained in the Scotland Bill include enabling the Scottish Parliament to set the thresholds and rates of income tax in Scotland.

The Scotland Bill has been published and will implement the recommendations from The Smith Commission which includes that the Scottish Parliament be given the power to set income tax rates and bands on earned income and to retain all of the income tax raised in Scotland.

We already know that the Scotland Act 2012 gives the Scottish Parliament the power to set the rates of Income Tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers. This will come into effect in April 2016 and there will be no restrictions on the thresholds or rates the Scottish Parliament can set.

All other aspects of Income Tax will remain reserved to the UK Parliament, including the personal allowance, the taxation of savings and dividend income and the ability to introduce and amend tax reliefs and the definition of income.

We recently reported that the Prime Minister was considering further tax powers for Scotland after a meeting with the Scottish First Minister. There is nothing obvious in the Scotland Bill pertaining to this, however we will keep an eye on what the law experts have to say when the Bill has been dissected and will report if there is anything relevant to employers and the payroll profession.

The Scotland Bill is not yet an act of law as the detail still needs to be debated by the Houses of Parliament.

Previous CIPP News

· Prime Minister considering more tax powers for Scotland - 19 May 2015

· Revenue Scotland goes live - 7 April 2015

· Draft legislation on further devolution for Scotland - 23 January 2015