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Publication - Consultation paper

A consultation on the Draft Scottish Fiscal Commission (Modification of Functions) Regulations 2016

Published
27 October 2016
Part of
Public sector
ISBN
9781786525680

An opportunity to comment on the regulations expanding the Scottish Fiscal Commission’s functions.

View supporting documents Supporting documents

Chapter 1: Income Tax Forecasting

Income Tax

16. Whilst the Commission's role in forecasting income tax revenue will change as a result of the income tax provisions in the Scotland Act 2016 coming into force from 1 April 2017, in our view no legislative changes are required to enable the Commission to discharge that changed role.

17. From 1 April 2017, the Scottish Parliament will have expanded powers allowing it to set the Scottish rate resolution, which can consist of more than one rate. The Scottish Parliament will in effect have the ability to set all rates and thresholds for tax on non-savings, non-dividend based income of Scottish taxpayers.

18. Section 13 of the Scotland Act 2016 states that the Scottish rate resolution consists of the "the Scottish basic rate, and any other rates, for the purposes of section 11A of the Income Tax Act 2007 (which provides for the income of Scottish taxpayers which is charged at those rates)", whilst the SFC Act states that the Commission must publish 5-year forecasts of income tax attributable to the Scottish rate resolution.

19. Therefore changes in the Scotland Act 2016 [5] (to 80 (C) of the 1998 Scotland Act) to expand income tax powers are worded in such a way that the Commission's duties in relation to the additional powers are already captured in section 2 of the SFC Act. This means that the SFC has a duty to carry out its function of forecasting revenue under the expanded Scottish rate resolution powers once in force. We therefore do not believe that any changes are required to the Act for the Commission to be under a duty to produce revenue forecasts in relation to expanded income tax powers from 1 April 2017, which in effect means forecasts for the 2018-19 budget year onwards.

QUESTION

Question 1: Do you agree that no changes are required to the Scottish Fiscal Commission Act in order for the Scottish Fiscal Commission to produce forecasts of revenue from the expanded income tax powers?

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