Scotland, a tax haven??

Following recommendations by the Calman Commission aka Commission on Scottish Devolution, Scottish income tax could be less than the UK rate by 10p per pound but this would be offset by a corresponding cut in the Treasury grant to Scotland.

Scottish Parliament already possesses the power to vary the basic rate of tax by 3p either way, known as the Scottish Variable Rate, although this has not been used to date. Tax devolution would enable Scotland to set and raise some tax revenues and exercise some fiscal responsibility and if the recommendations were to be accepted then they could come into force by 2015.

Legislative details, such as levels of personal allowance and NIC, will now be considered, along with other issues such as the definition of a Scottish taxpayer and whether HMRC will be able to cope with the changes.