Great Britain and Scotland are dividing tax competence

The British government has promulgated the project of legislative provisions, which will provide the Scottish government with competence on matters of income tax, air transport levy and obsolete equipment tax. This legislative leadership clarifies regulation of VAT-revenue distribution between the governments of Great Britain and Scotland.

Thus, Great Britain and Scotland are dividing competence in the sphere of income tax. HM Revenue and Customs is going to continue making budgetary decisions, which are concerned with income tax. While the amount of rate on the territory of Scotland nowadays is in competence of the Scottish government. Moreover, revenue from income tax-payers, who are residents of Scotland, will be transferred to Scottish budget. The amount of income tax may be established by the Scottish government without any restrictions from the direction of Great Britain.

Scotland also is supposed to acquire the right to collect fees and levies from passengers, which use Scottish airports. Revenue, derived from that source will similarly go straight to Scottish budget.

10 % of standard rate of VAT will be transferred to Scottish budget from all the bills for goods and services purchased or supplied in the stated jurisdiction. In spite of the fact that the rate will be determined as previously concerning the whole Great Britain, 2,5 % of reduced rate of VAT (equal to 5 %) will go to Scottish budget.

The Prime Minister has already sent a clear signal that in spite of impending elections, their outcome should not exert influence on the operating results of Smith’s Committee, which worked hard on stated above provisions.

The First Minister of Scotland noticed that even though that suggested provisions do not in the full extent correspond to Scottish vision, they show preparedness of Great Britain for compromise.

The whole list of Smith’s Committee’s suggestions you can find here: https://www.gov.uk/government/publications/scotland-in-the-united-kingdom-an-enduring-settlement

The source: https://www.gov.uk/government/news/5-reasons-why-scotland-is-more-powerful-as-part-of-the-united-kingdom