Taxes

Taxes are charges paid by individuals and businesses to help fund local and central government expenditure.

There are a range of taxes paid in Scotland, some fully devolved, some partially devolved, and some reserved to the UK, which are administered by different organisations.

Actions

We define the policy and legislation for the following taxes paid in Scotland:

• Council Tax, administered and spent by local authorities
• Non-domestic rates, administered and spent by local authorities
• Landfill Tax, administered by Revenue Scotland with support from SEPA
• Land and Buildings Transaction Tax, administered by Revenue Scotland with support from Registers of Scotland (RoS)
• Air Departure Tax, to be introduced in Scotland in the future
• Aggregates Levy, to be devolved to Scotland next year

We set the parameters for the following taxes:

• Scottish Income Tax, administered by HMRC

From 2020 to 2021, we will:

• have a Scottish budget which will, in part, be determined by VAT revenues raised in Scotland

Background

Successive legislative Acts have increased the Scottish Government’s powers in relation to the taxes paid by citizens and businesses in Scotland.

Scotland Act 1998 established the Scottish Parliament and provided for the variation of the basic rate of income tax in relation to the income of Scottish taxpayers.

Scotland Act 2012 amended the 1998 Act by devolving further powers to Scotland, including the ability to set a Scottish Rate of Income Tax and to legislate for and administer taxes to replace UK Stamp Duty Land Tax and Landfill Tax.

The Smith Commission report, published in November 2014, recommended further devolution over elements of taxation and public spending to the Scottish Parliament. This proposal was taken forward in the Scotland Act 2016, which received royal assent on 23 March 2016.

Scotland Act 2016 extended the country’s tax powers again by enabling the Scottish Parliament to set the income tax rates and bands that apply with the non-savings and non-dividend income of Scottish taxpayers (excluding the personal allowance) and to legislate for further taxes, including one to replace Air Passenger Duty in Scotland.

Bills and legislation

Scotland Acts

Scotland Act 2016

Scotland Act 2012

Scotland Act 1998

Devolved taxes

Landfill Tax (Scotland) Act 2014

Land and Buildings Transaction Tax (Scotland) Act 2013

Land and Buildings Transaction Tax (Amendment) (Scotland) Act 2016

Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Act 2018

Air Departure Tax (Scotland) Act 2017

Local government taxes

View a full list of Council tax: legislation

View a full list of Non-domestic rates: legislation

Contact

Email: Central Enquiries Unit ceu@gov.scot