Do you know that the Scottish Government will soon have complete powers to set income tax rates and collect these taxes in Scotland? The bill introducing these and other powers – mainly welfare – is going through the UK Parliament.
No-one is quite sure when these powers will be implemented, but the question we will all be asking is: will we all have to pay more taxes?
Before that, next April in fact, some earlier tax changes – the Scottish rate of income tax (SRIT) – will come into effect. This will cover earnings of the employed and self-employed, pensions and property income and will apply to taxpayers whose sole or main residence is in Scotland, regardless of where they work.
It does not matter where employers are based. All other aspects of tax remain under UK control, including personal allowances and other tax reliefs.
While UK tax rates remain at 20, 40 and 45 per cent, under SRIT the top 10 per cent will be removed and the Scottish Government will be entitled to replace this with whatever rate it chooses.
the Scottish Government needs to publish the rate any day now but with an election to the Scottish Parliament looming next year, the it is unlikely to announce an increase in SRIT for 2016.
There is huge ignorance about these changes which are going to affect us all.
• Barry Laurie is a tax partner with French Duncan Chartered Accountants