Scotland will start to implement the key tax measures outlined in the Smith Commission process with an announcement on the Scottish rate of income tax to be set out in the forthcoming Budget speech this autumn while the UK air passenger duty will be halved by 2018, before it is replaced by a Scottish equivalent.
Speaking at the opening of the Scottish parliament, First Minister Nicola Sturgeon confirmed that the Scottish government would begin to implement the additional powers to be devolved following the Smith Commission process, with a planned cut in air passenger duty to be brought in from 2018, and a Scottish rate of income tax to be set for 2016/17 in the forthcoming Budget.
Sturgeon said that ‘this programme for government outlines the legislation that the government will introduce between now and the end of March, and also the key policies we will pursue for the remainder of this parliament to support our economy, create a fairer society and improve our public services. But it does more than that.
‘This programme for government looks beyond the current parliamentary year, to the long term. It sets out how we intend to address the challenges of the future. It provides a policy platform that will inform our decisions in the spending review and Budget Bill, and shape our agenda for the next parliament.
‘It also begins to set out how we will use, creatively and ambitiously, the limited new powers proposed in the Scotland Bill.’
A number of measures for business were announced including:
plans to continue to fund the small business bonus which already supports 100,000 business premises across the country
an extension of support for the operation of four enterprise areas, currently operating across 15 sites, until 2020, and the creation of a fifth enterprise area at BioCity in North Lanarkshire. Companies locating in these sites will be eligible for rates relief, enhanced capital allowances, streamlined planning processes, skills and training support, and help to access international markets;
publish a new Manufacturing Action Plan this autumn; and
establish a new £40m growth fund for small and medium sized enterprises to provide microcredit finance up to £25,000, loans up to £100,000 and equity investment up to £2m.’
On tax, there were no clear signals about whether Scotland would adopt its own rates of income tax (SRIT), now part of its devolved powers allowing the Scottish parliament to flex rates up or down by up to 10% on UK wide income tax rates.
‘We are already consulting with business and others about the new tax powers in the Scotland Bill and we will set out our intentions in the Budget Bill. And this autumn we will receive the report of the Commission on Local Government Finance,’ Sturgeon said.
From April 2015, Scotland started collecting Land & Buildings Transaction Tax, the equivalent of Stamp Duty Land Tax (SDLT) in the rest of the UK, and Scottish Landfill Tax (SLfT).
Airline passenger duty (APD) will be reformed with a planned 50% cut by the end of the next parliament, effectively by 2021.
‘I can confirm one early commitment. The reduction of APD, which we plan to cut by 50% by the end of the next parliament, will begin in April 2018, when we introduce a replacement Scottish tax – an early indication of how we will use our new powers to encourage growth and jobs.’
There was also confirmed that the Land Reform Bill will be enacted before the Scottish parliament elections next year, coupled with plans to secure devolution of the crown estate in Scotland.
Source: Accountancy Live
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