John Swinney reveals £135,000 cost of tartan tax review

The Scottish Government is set to spend £135,000 looking at bringing back the so-called tartan tax despite rejecting it in the SNP manifesto and backing new powers in the Scotland Bill.

Ministers agreed to meet the cost of a viability study to return the computer systems required to administer the Scottish Variable Rate (SVR), commonly known as the tartan tax, to a state of readiness.

Finance Secretary John Swinney revealed the cost of the study in response to a question by SNP MSP Joe FitzPatrick on the progress of the SVR preparations.

Hide Ad
Hide Ad

The ability to vary Scottish income tax by 3p in the pound was one of the key powers in the original Scotland Act but it has never been used. Just six months before the election, Mr Swinney revealed he withheld 3.4 million from HMRC for the computer upgrade without consulting parliament.

The decision meant any new incoming government would be powerless to implement the SVR until at least 2013, prompting a reprimand from Holyrood's Finance Committee and a reminder that the SVR belongs to the Scottish Parliament, not the Scottish Government.

Mr Swinney said: "Her Majesty's Revenue and Customs (HMRC) and Scottish Government officials agreed the scope of and timescales for a viability study into the work required to return the computer systems which operate the SVR to a state of readiness.

"The Scottish Government has agreed to meet the cost of this viability study, which is estimated at 135,000. A report is expected before the end of June."

In February, Mr Swinney was urged to make a statement about how the SVR power could be reinstated. However, the following month the Scottish Parliament backed the Scotland Bill, which includes a completely new tax regime which would effectively render the SVR redundant.