Scotland to review feasibility of a "tartan tax"

THE SCOTTISH GOVERNMENT will study the viability of a "tartan tax" that allows it to vary the rate of income tax by 3p in the pound, the finance minister has indicated.

The Scottish Variable Rate (SVR), which gives the Scottish Parliament the ability to vary the rate of income tax by 3p in the pound, was one of the main powers introduced in the original Scotland Act. It has never been used and the ruling Scottish National Party (SNP) ruled it out in its election manifesto because it supported the new tax regime set out in the Scotland Bill going through Westminster.

However, finance minister John Swinney (pictured) said in a parliamentary answer that £135,000 had been set aside to review the feasibility of upgrading the computer systems required to administer the SVR.

"HM Revenue & Customs and Scottish government officials agreed the scope of and timescales for a viability study into the work required to return the computer systems which operate the SVR to a state of readiness," Swinney said.

"The Scottish government has agreed to meet the cost of this viability study, which is estimated at £135,000. A report is expected before the end of June."

The SNP was reprimanded by the Scottish Parliament finance committee for withholding £3.4m funding given by HMRC for upgrading the systems.