Tax in Deloitte in Scotland
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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?
In my last blog I talked about the introduction of the Scottish Rate of Income Tax (SRIT). I looked at some of the key changes the new legislation will make and specifically what it means for employers. Let’s not forget however that SRIT applies to all non-savings income, so the self-employed and pensioners will also be affected.
So much has happened in British politics over the last year that it would be easy to lose track of what is actually changing. Between the General Election, the Smith Commission, the beginnings of the EU referendum, among many other developments, there’s a lot for businesses to keep up with.
Entering the “real world” of work can seem a daunting prospect. On the first day, your mind is swimming with questions: What will my colleagues be like? What will they expect me to know? What time should I leave on my first day?
In most cases, you’ve already made up the answers in your head before you take a single step in the office.
April is historically an important month for legislative changes, with a raft of new rules and regulations introduced. This year is no different, and will herald the introduction of a big change to the Scottish real estate market: the Land and Buildings Transaction Tax (LBTT). Replacing Stamp Duty Land Tax (SDLT), it will affect all transactions involving the purchase of, and granting of leases over, Scottish property.
We all know that the North Sea is in uncharted territory. The headlines over the past few months speak for themselves: “North Sea oil industry close to collapse”, “North Sea oil at point of no return”, and “Oil price crash threatens the future of the North Sea oil fields”. I’m sure you get the gist.
Tax doesn’t have to be taxing. So goes the Revenue’s homonymic advertising slogan. As January 31 fast approaches –the last chance to get your self-assessment forms submitted on time – I’m sure some people don’t particularly agree with that statement.
It should be true if you take the right steps, though. For many, self-assessment forms won’t even cross their minds until the start of the New Year, which can result in a last minute rush. Last year 550,000 returns were filed on deadline day – 21,000 in the last hour!
In the run up to the referendum on Scottish independence, the three main UK political parties pledged to devolve further powers to Scotland. While the detail behind these new powers is awaited, it is worth remembering that the Scotland Act 2012 provided more powers to the Scottish Parliament, including devolution of some taxes, which will come into force from as early as next year.
If your business carries out any kind of innovation, it may be able to take advantage of a number of tax reliefs and other incentives, notably the UK’s generous R&D tax and Patent Box regimes.
The Chancellor’s Budget announcement saw some positive steps for the North Sea, many in line with the recommendations of Sir Ian Wood’s recent report on maximising recovery from the UKCS. However, there will be disappointment that the much discussed changes to taxation around bareboat charters will still come into force on 1 April.