Scotland's tax future - taxes explained

ICAS – the professional body of accountants – has much to contribute to a debate on tax devolution.

Tax devolution means any form of control of taxes passing from Westminster to Holyrood, whether under the Scotland Act 2012, the current campaign for full independence, or anywhere in between. As probably the single largest body of financial and tax experts in Scotland, with members throughout the world, ICAS has the depth of knowledge and experience to inform any debate over tax devolution, highlighting opportunities, pitfalls, administrative issues or behavioural responses. We have a wide range of overseas experiences and insights into the workings of the best, and least successful, practices.<

ICAS has a public interest remit, a duty to act not solely for its members but for the wider good. This paper is not written with a political perspective. ICAS is apolitical and will not take a stand for or against the Scottish independence referendum proposal. From a public interest perspective, the ICAS view remains that it is our role to share ICAS insights into the many complex issues and decisions involved in tax system design, operational experiences and practicalities. It also contributes the experience of decades of work which ICAS members and staff have undertaken, often without public profile, with the UK Government and its agencies on the shared agenda of a better-balanced outcome for all tax stakeholders.

The ICAS contribution so far in the context of the Scottish independence referendum debate has been to issue two papers on tax as well as provoking deeper debate around the future of pensions. Six questions were asked in our first tax paper "Scotland's Tax Future; What tax system would Scotland want?" on design principles and approaches. The practicalities that both the Scottish and UK Governments and people of Scotland would have to embrace to see tax devolution happen were the subject of our second paper "Scotland's Tax Future; The practicalities of tax devolution".

The Scottish Government issued "Scotland's Future Your Guide to an Independent Scotland" in November 2013 ("the Guide", also known as the "White Paper"), HM Treasury has also issued a number of discussion papers, and a considerable body of neutral analysis has emerged to offer insights and information into the impacts and effects of the independence referendum resulting in a 'Yes' vote. At the time of writing, the other political parties in the 'Better Together' campaign are finalising their approaches. ICAS members have also had the opportunity to hear from experts, politicians and both sides of the campaign at a key conference.

At the start of 2014, it seemed appropriate to reflect on the development of the debate so far and consider what progress has been made in addressing the topics in our first two tax papers. But the single biggest issue emerging over recent months is that many individuals, CAs or not, struggle to access the explanations they need to understand the place of our tax system in our economy – the big picture tax debate - even before the issues of independence or further devolution are factored in. The lack of simple numbers in the independence referendum debate so far has seemingly not been helpful. In this third tax paper, "Scotland's Tax Future; Taxes explained", the aim is also therefore to go back to some basics, address the information gap, and suggest an approach to understanding the role of tax in the referendum debate.

Download: Scotland's tax future explained - PDF [212 KB]


  • Political landscape
  • Tax

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