Scottish government to consider feasibility of tartan tax

Contractor accountants operating north of the border may be interested in the news that the Scottish government is to investigate whether a “tartan tax”, allowing it to vary income tax would be viable.

Under the original Scotland Act, the Scottish Parliament was given the right to implement a Scottish Variable Rate, and vary income tax by up to 3p in the pound. So far the right has not been taken up and the SNP did not include it in its latest election manifesto because the party supported the tax regulations included in the Scotland Bill which is currently being reviewed by Westminster.

However, John Swinney, the finance minister, has said that parliament has put aside £135,000 to look into the feasibility of upgrading the IT systems necessary to administer the Scottish Variable Rate.

HMRC and officials from the Scottish government have agreed timescales and the necessary scope of a feasibility study to ready computer systems for the introduction of SVR and the report should be presented before the end of this month.

The SNP recently received a reprimand from the Scottish Parliament finance committee for not releasing the £3.4 million worth of funding it received from HMRC for the upgrade of the systems.

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