What would happen to the tax system in an independent Scotland?

Scotland would inherit the tax system currently set up throughout the UK.

The Scottish Government proposes that there would be a period where we would operate the tax system along with HMRC on a shared basis. Taxpayers will therefore see no immediate change to their current arrangements.

However, the initial improvements to the system will be in place within the period of the first independent parliament between 2016 and 2020.

Independence gives us an opportunity to create a better tax system designed to meet Scotland’s needs. it would be simpler and cost less. It would be:

  • Simpler – tax rules and obligations well known, easily understood and liability is clear
  • Stable – making it easier for people and businesses to forward plan
  • Flexible – to respond to change, particularly in a dynamic and constantly evolving global economy
  • A tax system based on such clear principles will minimise administration and compliance costs, maximise tax-take and boost investment and growth
Will I pay more tax after independence?

No, there is no requirement to increase income tax or national Insurance.

We can afford to pay for every service we have with the taxes we currently collect. Income tax rates and bands will not change as a result of independence.


What specific changes have been proposed to the tax system?

The current Scottish Government has committed to increase personal tax allowance, benefits and tax credits to match inflation.

They plan to reduce corporation tax up to 3% to encourage businesses to invest and entice new companies to set up bases in Scotland.

They will reduce Air Passenger Duty by 50% to encourage more airlines to operate flights from Scottish airports and also to reduce the cost of flights for everyone – holidaymakers and business travellers.

A report in the Scotsman says that the current manner in which the UK HMRC operates is simply not fit for purpose. This bureaucratic monster is inefficient, lumbering, bad at collecting revenue, operates contrary to the needs of business, and penalises ordinary citizens unfairly.

The UK tax code has been called “insanely complicated”, and is riddled with disincentives to work or invest.

Scotland could create a tax collection system that actually works, and save money in the long term.

How much tax does Scotland currently pay into the UK?

In 2011/2012 Scotland contributed £56.9 billion in tax revenue to the UK.

This works out to be £10,700 per person, which is £1,700 more per person than in the whole of the UK.

It has been calculated that Scotland has paid an average of £1350 more per person every year since 1980…we can easily afford to pay our way.