And there shall be a Scottish tax system
A big day in the journey towards a Scottish tax system.
Today the Scottish Parliament has two more economic levers, the Land and Buildings Transaction Tax (LBTT) and the Scottish Landfill Tax (SLfT). Up till today the Scottish Parliament only has control of two minor taxes; council tax and business rates. The revenue from each of these taxes is approximately £2bn. The revenue from LBTT will be approximately £300m and SLfT £100m.
The Scottish Government has also shown that it wishes to do things differently. The Scottish Government decided to not use HMRC to administer the new Scottish taxes and instead has adopted the innovative approach of using two existing Scottish public bodies to collect these new taxes. An idea first proposed by myself in 2005. That means that whilst Revenue Scotland will be the collection authority accountable to the Scottish Parliament, some powers will be delegated to the Registers of Scotland and the Scottish Environmental Protection Agency. The importance of the creation of Revenue Scotland should not be underestimated.
I wrote an article for the Journal of the Law Society of Scotland predicting much of this almost ten years ago. This article an be found here.
Further evidence of how things are going to be done differently here in Scotland is a ‘General Anti-Avoidance Rule’ (GAAR) that is stronger than the UK version. The Scottish GAAR goes further than its UK counterpart as it targets artificial, not merely abusive schemes as with UK GARR.
Recent announcements from the Scottish Government on corporation tax, air passenger duty, reform of council tax and the re-introduction of the 50p rate of income tax also, I suspect, show that this is just the beginning.