New tax appeal court in Scotland should be independent from the national new tax authority, the group of tax reform with the low level of the income declared.

Simultaneously with the introduction of the new Scottish tax inspection to manage taxes, transferred from the UK, Scotland suffers an existing tribunals service to the Scottish Tribunals on 1 April 2017 and brings a lot of related changes, according to the legislative offers.
These offers include drafts of procedural rules for new court of the first level for tax chamber of Scotland which will be similar to an operating mode of present tax court of the first level.
Reacting to negotiations on new system, the group of tax reform with the low level of the income declared that tax chamber and tax court of the first level "actually, both shall be both conscious, and absolutely independent of the income of Scotland".
Also noted that the system of court shall be "available to all" and asked that the government considered a question of providing free legal services tax and accounting services to help people with low incomes.

Author: Sergey Panov

managing partner Finance Business Service


Transition of Scotland to a new Land and Buildings Transaction Tax (LBTT) was "operationally successful", according to the Scottish Parliament's Finance and Constitution Committee, which analyzed the impact of the tax on the real estate market.

The Land and Buildings Transaction Tax replaced British stamp duty land tax (SDLT) in Scotland from April 1, 2015 within the agreement with Great Britain which transfers responsibility for some taxes to Scotland.

LBTT of Scotland is based group with 145,000 pounds sterling (184,550 US dollars) with a free limit on the Land and Buildings Transaction Tax. In the amount of two percent the price is paid for a share of inheritance of real estate to 250,000 pounds sterling; five percent for a share to 325,000 pounds sterling; 10 percent to 750,000 pounds sterling; and 12 percent from the price above 750,000 pounds sterling.

In the report of Committee said that in spite of the fact that implementation of a tax was successful, it is too early to draw any final conclusions concerning influence of LBTT rates and groups after one year of operational management of the entity, and also due to the lack of consistency in the forecast and in data of productivity.

However most of interested persons who promoted a parliamentary request, agreed that rates were profitable for real estate market of primary buyer.

Author: Sergey Panov

managing partner Finance Business Service

Bank of Scotland

The Scottish Government has introduced tax legislation Council reform groups and rates from April 2017.

The legislation will implement the proposals announced by the SNP government in March. Properties that fall under high tax board strips (E, F, G and H) would pay more as a result of these bands coefficient increases in relation to the middle band (D) properties. The government estimates that this will lead to annual average increase of about GBP100 (USD132) for Zone E properties, GBP200 for F, GBP335 for band G and GBP517 range for range H.

The circuit board of reducing the tax would apply to families with low income, having children, and the government will introduce an exemption for families with low income living in conditions with high added value.

Frozen council tax, which has been in place since 2007, will be removed from April 2017. Local authorities will be able to increase the tax up to a maximum of three per cent per year.

The government expects to raise an additional reforms GBP100m a year in income or GBP500m, during the term of the current parliament. This money will be invested in the school education system in Scotland.

Finance Minister Derek Mackay said that the legislation "will not only protect household income and make local taxation fairer, they will also benefit thousands of young people across Scotland, as stated in our terms of education delivery. Despite the fact that there will be no change in the three four Scottish households, in terms of what they are paying council tax as a result of these reforms, schools across the country will notice a difference, it will make a significant investment."

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Income tax, Scotland

From 6th April 2016 the Scottish Parliament determine their income tax rate, part of the proceeds of the income goes to the coffers of Scotland and the rest to the Britain in the general treasury.

Not taxable premium bonds, as well as income in the accounts that are exempt from tax (individual savings accounts, etc.).

First Minister of Scotland Nicola Sturgeon announced plans to freeze the income tax rate. However, the British government this offer will only accept within the established framework. The exact level of rates should be set by the Scottish Government every year.

However, the Scottish Government believes that their offer is a more balanced approach that will be fair to taxpayers and increase rates at the same time generate additional revenue to be invested in public services in Scotland.

Along with the tax proposals First Minister published an analysis of the additional rate which showed that the rate does not increase to the year 2017/18.

Instead of offering large tax cuts in the next year the threshold of taxation will be from 43,000 GBP.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Scotland, tax issues

Institute of Chartered Accountants of Scotland published an article that explains the problems facing the country before the devolution of tax powers.

The document, prepared by the Tax Committee, calls for the publication of five-year RoadMap which explains the purpose of the Scottish fiscal policy.

Currently, the Scottish Parliament is responsible for the Scottish income tax rate applicable to the April 6, 2016. The UK government will deduct £ 0.10 from three British income tax rates. The Scottish Parliament will be able to charge a Scottish rate that will apply equally across these bands. The rate will be set at 10 percent which means that there will be no change in the level of tax for individuals pay. But in April 2017, the Scottish Parliament will be able to set the rate over income tax bands.

According to the Tax Committee, "if the income tax rate will deviate from the British then it needed for clear explanations and instructions to reassure taxpayers."

Furthermore, from 2019-20 Scottish Government will assigned a decrease in the standard rate from 0.10 pounds to 0.25 pounds.

Tax Committee said that "the purpose of assignment of VAT is to harmonize the tax revenue to the economy, VAT revenues could be a measure of the Scottish economy. This in turn will have an impact on the program of economic support of the Scottish Government the areas through which to grow the economy. For example, due to businesses are exempt from VAT (for example, financial institutions) or zero rate taxable businesses (e.g. food industry) which constitute a significant part of the Scottish economy. "

Author: Sergey Panov

managing partner Finance Business Service