PAYROLL INSIGHT
The devolution revolution
Justine Riccomini, head of taxation (Scottish Taxes, Employment and ICAS Tax Community), for ICAS , examines the current state of tax devolution in the UK and explains what themain implications are for employers and payroll professionals to consider A s we all know, the UK currently comprises four countries: England, Scotland, Wales, and Northern Wales in 1997, and in Northern Ireland in 1998 – devolved governments
as an agreement can be reached and the suspension lifted. The Corporation Tax (Northern Ireland) Act 2015 was passed to facilitate the devolution of powers to the NIA to set a rate of corporation tax on certain trading income, but the commencement regulations have not yet been passed. The devolution of corporation tax was supposed to commence in April 2018. No other devolved or partially devolved taxes have been introduced. In Scotland, however, the Scotland Acts 2012 and 2016 have provided for a framework agreement between the UK and Scottish governments, which has led to the Scottish parliament enacting a land and buildings transaction tax and a landfill tax – which are the equivalents of stamp duty land tax (SDLT) and landfill tax
and administrations were established which became known as the Scottish parliament, National Assembly for Wales (NAW), and the Northern Ireland Assembly (NIA). ... tax base as well as the UK personal
Ireland (NI). Although characterised by distinct nationalities, and languages in some areas, the tax legislation governing the jurisdictions has largely been applied UK-wide since the 1920s. Since partition of Ireland in 1920 and the renaming of the jurisdiction now known as the United Kingdom of Great Britain and Northern Ireland in 1927, one tax system has prevailed throughout the UK for the last few generations. It has evolved rapidly since the second world war and the UK’s membership of the European Economic Community in 1973, which became the European Community twenty years later. However, following referenda – in Scotland and
allowance are both reserved
The devolved administrations The NIA was suspended in January 2017 and the devolution of taxes has also therefore ground to a halt until such time
England, Wales, NI
Scotland *
Income tax rates
%
Bands £
%
Bands £
Starter rate Basic rate
n/a
19 20 21 41
12,500–14,549 14,549–24,944 24,944–43,430 43,430–150,000
20
Up to 37,500
Intermediate rate
n/a
Higher rate
40
37,501–150,000
Additional rate (called ‘top’ rate in Scotland)
45
Over 150,000
46
Over 150,000
* The Scottish Rates and bands are taken from https://bit.ly/2s9zOaF.
| Professional in Payroll, Pensions and Reward | April 2019 | Issue 49 20
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