Comment: The Autumn Statement and Scottish taxpayers

In recent years, the Autumn Statement has involved as many announcements of tax changes as details of spending plans.

Not this year – tax announcements were at a minimum – with not much more to be found in the detailed material published as George Osborne sat down. The Chancellor was full of optimism, supported in this not so much by the changes he was announcing as by a more optimistic forecast from the Office for Budget Responsibility (OBR) of how things would go. The OBR is predicting rather greater receipts from taxation than had been anticipated.

The Spending Review was for the most part just that – a review of how taxes are to be spent, rather than how they are to be raised. Having an additional Budget in July this year may well have removed the need for much by way of new tax announcements now.

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While that is a departure from recent Autumn Statements, another feature was very much a continuation of the current direction of travel. Much of what the Chancellor had to say was of no direct relevance to Scotland because the spending decisions mentioned will be taken instead by his Scottish equivalent. That is, for example, the case in relation to lack of announcement on spending on the police – a fully devolved matter. But the other great tracking back in the statement, on the reductions in tax credits, is a UK matter and will affect Scottish claimants.

Direct references to Scotland reflect the current state of flux in the devolution settlement – the Scotland Bill currently going through the UK Parliament will change the balance significantly, making the Scottish Parliament responsible for raising considerably more of the funds that it spends. There will still be a block grant to come from the UK Parliament; and the way the new Scottish tax powers will affect the level of that grant remains a matter of negotiation. But the spending review confirmed real terms increases to capital spending budgets – and an announcement at the micro-level of support for the Burrell Collection refurbishment.

Reminders of the Autumn Statement’s limited direct effect in Scotland occurred throughout the speech. So the very significant additional power given to local authorities in England to raise a “precept” (a new tax) to fund social care will not be relevant in Scotland, where such care is already funded, in part, by the central Scottish Government. And one of the few major new tax changes that was announced, an increased rate of Stamp Duty Land Tax (SDLT) on holiday and buy-to-let homes, will be of no effect at all in Scotland, unless and until the Scottish Government decides to replicate it for SDLT’s Scottish replacement, Land and Buildings Transaction Tax. But the other major tax increase brought forward, the apprenticeship levy on large employers, will apply to Scots employers – and this will not be part of the increased devolution of taxes over the next few years.

So Scottish taxpayers will still have to look in at least two directions – the balance between Westminster and Holyrood is changing, but not yet so that we can ignore the former. The full picture for Scotland can only emerge when Mr Swinney makes his own spending – and tax – announcements, closer to Christmas, or in the New Year.

• Alan Barr, Head of Personal & Family, Brodies LLP