The Chartered Institute of Taxation has welcomed the passing of the Revenue Scotland and Tax Powers Bill, which changes the tax landscape regardless of the outcome of the independence referendum.
Moira Kelly, chair of the CIOT’s Scottish technical subcommittee, noted that, while “all eyes are fixed” on the outcome of the referendum on 18 September, Scotland’s tax landscape has now changed permanently regardless of the vote.
The Bill establishes Revenue Scotland, the tax authority responsible for collecting devolved taxes from April 2015, and provides for the establishment of Scottish tax tribunals.
It introduces a general anti-avoidance rule (GAAR) to enable Revenue Scotland to counteract tax advantages in relation to the devolved taxes that arise from “tax avoidance schemes that are artificial”.
Finance secretary John Swinney said he was determined that Revenue Scotland “will combat tax avoidance as vigorously and effectively as possible”. The “wide-ranging” GAAR “will allow Revenue Scotland to take robust counteraction against artificial tax avoidance schemes – not just the most abusive end of the spectrum”.
Guidance on the scope of the rule is set out in an explanatory note prepared by the Scottish government and updated on 13 August.
The Bill, passed by the Scottish Parliament on 19 August, will be submitted for Royal Assent in due course. Once it has received Royal Assent it will become an Act of the Scottish Parliament.
“Scotland now has its own tax authority, firmly established in law,” Moira Kelly said.
Landfill tax will be devolved to Scotland, and a new land and buildings transaction tax will replace stamp duty land tax, from April 2015. New Scottish rates of income tax are expected to commence in April 2016.
Kelly added that, while some positive changes were made during the passage of the Bill, some disappointments remained “including a lack of detail on the rights, duties and obligations of agents and advisers”.
Last month the Scottish government claimed that under an independent Scotland a 3% cut in the headline rate of corporation tax, proposed “in part to resist the gravitational pull of London”, could “boost employment by 27,000 jobs” in the long term.