THE CRITERIA for paying tax in Scotland once tax powers are devolved from Westminster to Holyrood has been questioned in a paper entitled Scotland's Future: What tax system would Scotland want? published by ICAS.
The Scotland Bill was given Royal assent at the start of May, with the legislation taking force in April 2016. The move will see powers to levy taxes fully devolved to Edinburgh.
In the report, ICAS also queries the implications of progressive and flat-based tax rates and who would run the system - currently believed to be HMRC - with concerns raised about Scotland's ability to manage such a significant undertaking.
"The Scottish Government has at present neither an established mechanism, nor the expertise or resources to respond alone to these questions", it says. "The reservation of tax powers to Westminster means it has to be questioned whether the Scottish Government has the full understanding of the complexities of the operation of a tax system to enable it to opine authoritatively on this topic."
There are also questions raised over what would qualify someone as a Scottish taxpayer. While it was announced that the definition of a Scottish taxpayer will be based on the location of an individual's main place of residence, with further clarification to follow from HMRC, there are still issues of which companies would be liable in Scotland. Specifically, the issues revolve around whether Scottish-incorporated businesses only, or companies with places of business in Scotland.
In a speech last month, Scottish first minister Alex Salmond admitted he supported lower corporation tax in Scotland, while last year he proposed the idea of a separate tax body to administer the collection of corporation tax north of the border.
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