TaxCorporate TaxScotland on cusp of securing massive tax-raising powers

Scotland on cusp of securing massive tax-raising powers

Scotland set to receive raft of new tax-raising powers regardless of referendum result

Scotland on cusp of securing massive tax-raising powers

WHATEVER the outcome of the Scottish independence vote on Thursday, one result is guaranteed – Holyrood will have hugely increased tax-raising powers.

And such a move could potentially unleash even more destructive powers to destroy what remains of the 307-year old Act of Union.

With the Better Together and Yes Scotland’s votes judged too close to call on the eve of the historic referendum, Salmond will champion what he declares is a clear desire in Scotland for greater freedom within the UK.

The No camp are widely tipped to immediately appoint an independent chair to lead a cross-party taskforce to create new tax powers for the Scottish parliament, which could begin as early as Friday.

Taken aback by the rapid narrowing in the polls and growing support for independence, the leaders of Britain’s three main political parties have said they would keep the funding equation that enables a higher level of public spending north of the border and vow to publish draft legislation giving Scotland major tax and welfare powers by the end of January 2015.

But such a move threatens to unleash a major Conservative backlash over the powers of Scottish MPs in the Commons and Scotland’s profligate spending.

Central to this growing ire is the continuation of the Barnett formula, the government’s funding system that hands over £1,300 more per head for Scotland than the UK average, a status quo set to wind up Welsh assembly members, English council leaders and Westminster backbenchers alike.

Income tax looks set to arouse the strongest feelings, with Holyrood about to be empowered to alter the UK rate by around 10p in the pound, while Labour favours a 15p rate. The Con-Dem alliance is happy to gift the Scots complete control over personal income tax rates.

And should Scotland ultimately vote no, the nationalists will fight to secure a version of devo max, where it would control the right to set its own income and corporation tax rates as well as air passenger duty and a range of social and welfare powers.

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