Tax in Deloitte in Scotland
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Only 5 weeks ago, the UK Chancellor Philip Hammond gave his Budget speech announcing that “the era of austerity (is) finally coming to an end”. On 12 December the Scottish Finance and Economy Secretary, Derek Mackay, will deliver his Scottish Budget detailing the Government’s spending and tax plans for the coming year. The question on many Scottish taxpayers’ minds is whether their finances will enjoy a post austerity boost.
Productivity and jobs are vital to the wealth and welfare of Scotland. If we could solve Scotland’s productivity challenge, this would provide a unique opportunity to create a more prosperous society and improve living standards.
The growth of management and employee ownership in recent years has been recognised as a force for good in the success of such businesses in Scotland in recent years. The benefits are obvious for both management and Private Equity (PE). Those with an ownership stake are much more likely to be incentivised to drive a business forward, thus increasing the size of the ‘pie’ for the investors.
With the introduction of the Scottish income tax, we now have a more direct link between the economy, tax receipts and the Scottish Budget. The significance of the Barnett Formula block grant has been reduced, and this will expose the budget in Scotland to the risk of a reduction in economic performance but will mean that the Scottish Government will have more to spend if the economy grows.
With the end of the financial year upon us, now is a good time to reflect on Scotland’s economic performance over the last twelve months and perhaps more importantly, consider the challenges that lie ahead.
The deadline for 2016/17 tax returns is only days away. Those who are self-employed, receive rental or savings income over certain limits, or who have made capital gains over the annual exemption of £11,100 for 2016/17 will need to complete their self-assessment by the end of the month. People who receive child benefit and where the higher earner in the couple has income of over £50,000 are also affected.
By Lyndsay MacGregor, Associate Director, Tax
Over the past 15 or so years, we have seen many hundreds of companies implement equity incentives using ‘Growth Shares’.
Growth Shares are a bespoke solution, such that no two arrangements are the same. However, in general terms, they are a separate class of shares, which only deliver a return at a point in the future (generally on exit) and only to the extent that the value of the underlying company at that time exceeds a pre-determined threshold.
The end of the tax year is fast approaching and this is always a good time to ensure your tax house is in order. With this in mind, we’ve put together some top tips for things that you should consider before 5 April 2016.
Few days are met with more anticipation, and sometimes trepidation, than Budget day. This year’s set of announcements were a complex mixture of tax changes, in what will be the first revenue-neutral Budget of this Parliament.
Some gained and others found themselves worse off from proceedings. Among the winners were individuals, savers, higher rate taxpayers, small businesses and oil and gas companies. Those who fared less well were larger businesses, property investors and, potentially, people who like to indulge in a sugary drink.
The last couple of years have seen a great deal of change in Scotland – devolution continues to evolve and with the fiscal framework discussions now concluded, more is to come. On top of all this, we have the Scottish Parliament elections looming.
Against this backdrop, many tax practitioners will be wondering: what’s next for income tax rates and council tax in Scotland?