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Scottish Variable Rate

The Scottish Variable Rate (SVR) is the power set out in the Scotland Act 1998 that enables the Scottish Parliament to vary the standard rate of income tax in Scotland by up to 3p in the pound. The IT systems necessary to operate the SVR were originally set up by the Inland Revenue from 1998 onwards. Following the first Scottish parliamentary elections in May 1999, the Scottish administration decided not to use the powers in the lifetime of that Parliament. After 2000, the Inland Revenue in agreement with the then Scottish Executive decided not to make further changes to the IT systems that had been put in place to operate the SVR. The Inland Revenue stated that the system was being mothballed. Following the 2003 elections, a decision was again made by the incoming Administration not to exercise the tax varying powers, and consequently the position of not updating IT systems was continued. The tax varying powers in the Scotland Act remain in place. The UK Government's Scotland Bill, published in November 2010, proposes to replace the powers.

In preparation for the 2007 Scottish parliamentary elections, there was communication with HMRC about the actions necessary to return the IT systems necessary to operate the SVR to a condition where the power to vary the SVR could again be exercised. Meetings in February and March 2007 established that substantial further work would be required to bring the IT systems up to the necessary state of readiness, with the costs falling on the Scottish budget. The incoming Administration in May 2007 made clear that it did not intend to exercise the SVR powers during the lifetime of the 2007 to 2011 Parliament.

Following regular contact and discussion between Scottish Government and HMRC officials over the period 2008 to 2010, on 28 July 2010 HMRC advised that, to prepare IT systems to operate the SVR with effect from April 2012, further work costing an estimated £7 million would be required. The Scottish Government was asked to make a decision, including agreement to pay for this work, within 3 weeks - by 20 August. Further information was sought from HMRC, and on 15 September 2010 HMRC indicated that they were working on a detailed response to a number of questions posed by the Scottish Government. The next communication from the UK Government was a letter from the Secretary of State for Scotland dated 18 November to the First Minister. The letter was copied to each of the political parties in the Scottish Parliament.

The Scottish Parliament's Finance Committee agreed on 14 December to carry out an inquiry on issues around the Scottish Variable Rate of Income Tax. To assist with that inquiry, the Scottish Government has now published all relevant papers on the Scottish Variable Rate.

Note: A small number of papers dating from 1998, 1999 and 2000 were overlooked in the initial publication on 10 January 2010 and have now been added. (1998 folder - documents 1 and 2, 1999 folder - documents 12, 17, 18, 19, 22, 25, 27 and 32 and 2000 folder - document 3)

2010 Documents

Downloadable document:

SVR 2010 documentsSVR 2010 documents [ZIP, 2945.1 kb: 10 Jan 2011]
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2009 Documents

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SVR 2009 documentsSVR 2009 documents [ZIP, 377.3 kb: 10 Jan 2011]
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2008 Documents

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SVR 2008 documentsSVR 2008 documents [ZIP, 3071.5 kb: 10 Jan 2011]
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2007 Documents

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SVR 2007 documentsSVR 2007 documents [ZIP, 3613.9 kb: 10 Jan 2011]
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2006 Documents

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SVR 2006 documentsSVR 2006 documents [ZIP, 4594.5 kb: 10 Jan 2011]
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2005 Documents

Downloadable document:

SVR 2005 documentsSVR 2005 documents [ZIP, 2458.5 kb: 10 Jan 2011]
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2004 Documents

Downloadable document:

SVR 2004 documentsSVR 2004 documents [ZIP, 2860.6 kb: 10 Jan 2011]
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2003 Documents

Downloadable document:

SVR 2003 documentsSVR 2003 documents [ZIP, 1011.4 kb: 10 Jan 2011]
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2002 Documents

Downloadable document:

SVR 2002 documentsSVR 2002 documents [ZIP, 1158.1 kb: 10 Jan 2011]
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2001 Documents

Downloadable document:

SVR 2001 documentsSVR 2001 documents [ZIP, 382.8 kb: 06 Jan 2011]
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2000 Documents

Downloadable document:

SVR 2000 documentsSVR 2000 documents [ZIP, 7230.5 kb: 16 Jan 2011]
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1999 Documents

Downloadable document:

SVR 1999 documentsSVR 1999 documents [ZIP, 3915.5 kb: 16 Jan 2011]
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1998 Documents

Downloadable document:

SVR 1998 documentsSVR 1998 documents [ZIP, 14686.9 kb: 18 Jan 2011]
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1997 Documents

Downloadable document:

SVR 1997 documentsSVR 1997 documents [ZIP, 687.5 kb: 05 Jan 2011]
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