Taxation in Scotland today involves payments that are required to be made to three different levels of government: to the
UK government, to the
Scottish Government and to
local government. Currently 32.4% of taxation collected in
Scotland is in the form of taxes under the control of the
Scottish parliament
The Scottish Parliament ( gd, Pàrlamaid na h-Alba ; sco, Scots Pairlament) is the devolved, unicameral legislature of Scotland. Located in the Holyrood area of the capital city, Edinburgh, it is frequently referred to by the metonym Holyro ...
and 67.6% of all taxation collected in Scotland goes directly to the UK government in taxation that is a reserved matter of the UK parliament.
History
Until the 17th century, taxation was regarded as 'an extraordinary source of revenue that was levied for a specific purpose such as the defence of the realm'. However, during the 17th century,
Parliament permitted a Land Tax to be collected from 1667, a
Hearth tax from 1691-1695 and a
Poll tax
A poll tax, also known as head tax or capitation, is a tax levied as a fixed sum on every liable individual (typically every adult), without reference to income or resources.
Head taxes were important sources of revenue for many governments fr ...
from 1693-1699.
The 1707
Union of the
Kingdom of Scotland with the
Kingdom of England formed a new
Kingdom of Great Britain, so that responsibility for taxation in Scotland became a matter for the
Westminster Parliament, now the legislature for the new state.
Devolution of tax powers
The creation of a devolved Scottish parliament in 1999 was accompanied by a limited transfer of taxation powers: the
Scotland Act 1998 transferred the power to legislate for local taxation and also
the power to vary income tax by plus or minus 3 pence in the pound. Most taxation powers in Scotland following the creation of the parliament remained a reserved matter for Westminster. Following the
Calman Commission, the
Scotland Act 2012 transferred powers over
Stamp duty Land Tax
Stamp duty in the United Kingdom is a form of tax charged on legal instruments (written documents), and historically required a physical stamp to be attached to or impressed upon the document in question. The more modern versions of the tax no l ...
, and
Landfill Tax (both since replaced by
Land and Buildings Transaction Tax and
Scottish Landfill Tax
Scottish Landfill Tax (SLfT) is a tax which is charged in Scotland under the Landfill Tax (Scotland) Act 2014. It replaced the UK Landfill Tax from 1 April 2015.
Revenue Scotland administers and collects SLfT with support from the Scottish Env ...
, respectively) and reduced rates of Income tax in Scotland by 10 pence in the pound at all bands, reducing the
Barnett formula by the equivalent sum, and requiring the Scottish parliament to set a Scottish Income tax rate to replace the lost revenue but with the ability to set it higher or lower than 10 pence in the pound if it wished.
Following promises made during the
Scottish independence referendum
A referendum on Scottish independence from the United Kingdom was held in Scotland on 18 September 2014. The referendum question was, "Should Scotland be an independent country?", which voters answered with "Yes" or "No". The "No" side wo ...
that led to the
Smith Commission, the
Scotland Act 2016 added powers over
Air Passenger Duty and full control over Income tax on non savings and non dividend income (excluding the personal allowance which is still set by the UK parliament.)
Despite these tax powers having been transferred, over half of all taxes collected in Scotland remains under the direct control of the UK parliament which has remained a reserved matter to itself all powers over
Corporation tax,
National Insurance,
Value-added tax (VAT),
Capital gains tax,
Inheritance tax
An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died.
International tax law distinguishes between an es ...
,
Aggregates Levy
Aggregates Levy is a tax levied on the commercial exploitation of rock, sand, and gravel in the United Kingdom.
History
The Aggregates Levy was introduced in 2002. Revenues were initially placed into the Aggregates Levy Sustainability Fund unt ...
Insurance Premium Tax and
Motoring taxes.
[{{cite web, title=What are Scotland's tax powers? , url=https://www.bbc.co.uk/news/uk-scotland-scotland-politics-35866776%20%22What%20are%20Scotland's%20tax%20powers?", date=30 November 2016, access-date=7 February 2018]
See also
*
Blanch fee
Blanch fee, or blanch holding (from French ''blanc'', white), an ancient tenure in Scots land law, the duty payable being in silver or "white" money in contradistinction to gold. The phrase was afterwards applied to any holding of which the quit- ...
*
Buttock mail
*
Court of Exchequer (Scotland)
*
Edinburgh congestion charge
The Edinburgh congestion charge (also known as Edinburgh road tolls) was a proposed scheme of congestion pricing for Scotland's capital city. It planned to reduce congestion by introducing a daily charge to enter a cordon within the inner city, w ...
*
Full fiscal autonomy for Scotland
*
Government Expenditure and Revenue Scotland
*
Local income tax in Scotland
Several political parties have advocated a local income tax in Scotland as an alternative to the Council Tax, as part of funding for local authorities. Various proposals were promoted during the 2007 general election campaign.
Proposals
In 2004 ...
*
Taxation in the United Kingdom
*
Teind
In Scotland a teind () was a tithe derived from the produce of the land for the maintenance of the clergy.
It is also an old lowland term for a tribute due to be paid by the fairies to the devil every seven years. Found in the story of Tam Lin as ...
*
Window tax
References