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Moore dismisses SNP's Calman concerns

27 Jul 10

Scottish secretary argues precise details of tax-setting powers could be controlled through secondary legislation

Scottish Secretary Michael Moore has countered SNP doubts over the recommendations of the Calman Commission, indicating details of Scotland’s proposed tax-setting powers will be dealt with in secondary legislation. First Minister Alex Salmond had voiced concern that recent changes in the income tax regime – particularly the raising of the personal allowance – undermine Calman’s calculations, leaving a potential shortfall of £250 million in Scotland’s budget.

Under Calman’s proposals, Scottish income taxes set by Westminster will be kept 10p in the pound below the UK rate, with a proportional cut in the nation’s central government grant. Holyrood would then be free to top this up with its own income tax rate, determined by its budgetary requirements. The move would give Scotland much greater fiscal autonomy, but potentially weakens the SNP government’s argument for full independence.

Although broad enabling powers would be dealt with in the new Scotland Bill, being tabled this autumn, the precise details of implementation could be left to secondary legislation, argued Moore, giving Holyrood the flexibility to ensure Scotland does not lose out from changes made at Westminster.

However, many fear these technical challenges could be considerable and a number of technical groups are set to begin work the practical issues, not least determining whether a “Scottish taxpayer” should be defined by where he lives or where he works. Moore and the Exchequer Secretary at the Treasury, David Gauke, have recently met with the newly formed Calman Commission Implementation Group, which includes ICAS and The Law Society of Scotland, to discuss these points.

Derek Allen, Director of Taxation at ICAS said, “It’s important that ICAS sits on this group in order to reflect the views of our members and their clients. Clearly, the Institute is apolitical, so we feel we can make a strong contribution, without fear or favour. Important issues to address at the outset are defining who a Scottish taxpayer actually is and ensuring that any changes to Scots law as a consequence of legislation are properly considered and do not add to regulatory burdens.”

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