Scots confused over devolved tax powers regime
11 Oct 2019
Scots are struggling more than ever to understand how devolved tax powers work, but a majority are supportive of Scottish government plans for new tourist and car parking taxes, according to research by CIOT
11 Oct 2019
A poll of Scottish public understanding and awareness of devolved taxes found 91% said they had little or no understanding of the definition of a Scottish taxpayer, an increase of seven percentage points compared to the 2018 survey, while 86% think they need better information about how taxes are decided in Scotland.
This is despite the introduction of the Scottish rate of income tax (SRIT) over two years ago.
There was a net drop of six percentage points in the number of Scots who said that the relationship between Scottish and UK taxes was ‘easy to understand’. In addition, there has been a decline in the number of people who can correctly identify that responsibility for income tax was shared between Holyrood and Westminster, down from 34% in 2018 to 26% this year.
Nearly half of Scots (48%, up from 41% in 2018) now think income tax is set wholly by the Scottish Parliament. Additionally, the number of people who think that the fully devolved land and buildings transaction tax is set by Westminster has risen from 24% to 28%.
Despite this confusion over how devolved taxes operate, the survey identified broad support for the Scottish government’s proposals to give councils the power to introduce new taxes on tourists and car parking.
Opinion was split almost evenly between those who thought the taxes should be set and controlled by Holyrood (32%) and those who support local council control (37%).
The poll, which surveyed over 1,100 people across Scotland, also found that 45% of Scots believe that the amount of income tax they pay has gone up in recent years, an increase of 6% on 2018. The percentage of respondents agreeing to this increased the higher on the income scale they were placed.
Alexander Garden, chair of CIOT’s Scottish technical committee, said: ‘Devolution has changed the Scottish tax system, but this poll confirms that a lot of work still needs to be undertaken to improve the public’s understanding over how tax responsibilities are split between Holyrood and Westminster.
‘That public awareness has shown signs of waning compared with last year suggests that the initial publicity surrounding these changes has started to wear off.
‘These figures should provide both the Scottish Government and HMRC with the impetus to renew their efforts to communicate tax changes to the general public.’
The Scottish Parliament passed the Transport (Scotland) Bill this week, which includes a provision for councils in Scotland to have the power to charge a levy on workplace parking. Under the new rules, large businesses would pay an annual workplace parking levy (WPL) for every parking space they provide for workers. The firms themselves would then decide whether to pass the cost on to staff. So far, only Glasgow and Edinburgh have signalled they plan to introduce WPL.
The Scottish government is currently consulting on the principles of a local discretionary transient visitor levy or tourist tax. The consultation closes on 2 December.
In addition, Holyrood says it has also taken the first steps to introducing a new £10 weekly Scottish child payment, with draft regulations being sent to the Scottish Commission on Social Security for scrutiny.
Once fully rolled out, the benefit could help up to 410,000 eligible under 16s. It would be paid every four weeks as a lump sum to support parents with the cost of bringing up children, including clothing or school activities, similar to the existing child benefit regime, and would increase annually in line with inflation.
If the proposals go ahead, low income families will be able to apply for the £10 a week payment for every child aged 0-6 for applications in autumn 2020, with the first payments reaching families by Christmas. It will be rolled out in full to eligible families by the end of 2022.
By Pat Sweet