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The Scotsman cartoon: Income tax powers

Illustration: Iain Green

Illustration: Iain Green

Scotland will soon be able to further unlock its huge economic potential with powers to vary the income tax bands at different rates being handed to the Scottish Government.

The 2012 Scotland act allows Holyrood to change income tax bands by up to 10p but altering the basic rate must also take place in the 40p rate for salaries over £42,000 and the 45p rate for those earning over £150,000. Westminster yesterday inserted two clauses amending the Scotland act, which could allow for new reforms in the event of a No vote in the referendum.

The Scottish Government’s current inability to alter rates differently has been one of the central issues in the devolution debate, particularly the so-called “lock-step” which is said to tie the hands of the Scottish Government.

 

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