Scotland Bill

House of Commons

Session 2010 - 11
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Scotland Bill

Scotland Bill
Part 2 — Ministers and their powers
15

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Speed limits: supplementary
(1)
The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc)
Order 1999 (S.I. 1999/1750) is amended as follows.
(2)
In Schedule 3 (functions exercisable after consultation), in the entry for the
Road Traffic Regulation Act 1984—
5
(a)
omit paragraph (a) (section 17(2));
(b)
in paragraph (f), omit “and 88(1) and (4)”.
(3)
In the Schedule to the Scotland Act 1998 (Transfer of Functions to the Scottish
Ministers etc) Order 2000 (S.I. 2000/1563) omit the entry for the Road Traffic
Regulation Act 1984 (section 88(1)(a) and (4)).
10
(4)
The transfer by virtue of section 21 of a function exercisable by the Secretary of
State to the Scottish Ministers (a “transferred function”) does not affect the
validity of anything done (or which has effect as if done) by or in relation to the
Secretary of State before the commencement of that section.
(5)
Anything (including legal proceedings) which, at that commencement, is in the
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process of being done by or in relation to the Secretary of State may, so far as it
relates to a transferred function, be continued by or in relation to the Scottish
Ministers.
(6)
Anything done (or which has effect as if done) by or in relation to the Secretary
of State for the purposes of or in connection with a transferred function has
20
effect, if it is in force at that commencement, as if done by or in relation to the
Scottish Ministers, so far as that is required for continuing its effect.
(7)
But an instrument containing regulations or an order made by the Secretary of
State is not to be treated as if made by the Scottish Ministers for the purposes
of section 64(2C)(a) or (b) of the Road Traffic Regulation Act 1984.
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23
Implementation of international obligations
(1)
The 1998 Act is amended as follows.
(2)
After section 57 insert—
“57A
International obligations
Despite the transfer to the Scottish Ministers by virtue of section 53 of
30
functions in relation to observing and implementing international
obligations, a function in relation to those matters which is exercisable
by the Scottish Ministers is also exercisable by a Minister of the Crown
as regards Scotland if it was exercisable by that Minister as regards
Scotland immediately before that transfer.”
35
(3)
In section 118 (subordinate instruments) after subsection (4) insert—
“(4A)
But, for the purposes of the exercise of a function in relation to
observing or implementing international obligations, a provision to
which subsection (4) applies is to be treated as complied with if it is
complied with either—
40
(a)
as it has effect with the modifications made by that subsection,
or
(b)
as it would have effect without those modifications.”

Scotland Bill
Part 3 — Finance
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Part 3
Finance
Introductory
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Taxation: introductory
(1)
The 1998 Act is amended as follows.
5
(2)
Before Part 5 insert—
“Part 4A
Taxation
Chapter 1
Introductory
10
80A
Overview of Part 4A
(1)
In this Part—
(a)
Chapter 2 confers on the Scottish Parliament power to set a rate
of income tax to be paid by Scottish taxpayers, and
(b)
Chapters 3 and 4 specify the taxes about which the Scottish
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Parliament may make provision in the exercise of the power
conferred by section 28(1).
(2)
The power to make provision about a devolved tax is subject to the
restrictions imposed by—
(a)
subsection (3), and
20
(b)
the other provisions of this Part.
(3)
A devolved tax may not be imposed where to do so would be
incompatible with any international obligations.
(4)
In this Act “devolved tax” means a tax specified in this Part as a
devolved tax.
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80B
Power to add new devolved taxes
(1)
Her Majesty may by Order in Council amend this Part so as to—
(a)
specify, as an additional devolved tax, a tax of any description, or
(b)
make any other modifications of the provisions relating to devolved
taxes which She considers necessary or expedient.
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(2)
An Order in Council under this section may also make such modifications of—
(a)
any enactment or prerogative instrument (including any enactment
comprised in or made under this Act), or
(b)
any other instrument or document,

as Her Majesty considers necessary or expedient in connection with other
35
provision made by the Order.”
(3)
In section 93 (agency arrangements)—

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Part 3 — Finance
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(a)
after subsection (2) insert—
“(2A)
The collection and management of a devolved tax is a specified
function of the Scottish Ministers.”;
(b)
in subsection (3), in the definition of “specified”, after “specified” insert
“(subject to subsection (2A))”.
5
(4)
In section 127 (index of defined expressions), at the appropriate place insert—

“Devolved tax
Section 80A(4)”.

(5)
In Part 2 of Schedule 5 to that Act, in Section A1 (specific reservations: fiscal,
economic and monetary policy), for “Exception” substitute “Exceptions” and
after that heading insert—
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     “
Devolved taxes, including their collection and management.”
(6)
In Schedule 7 (procedure for subordinate legislation), in paragraph 1, at the
appropriate place insert—

“Section 80B
Type A”.

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Amendments relating to the Commissioners for Revenue and Customs
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(1)
The Commissioners for Revenue and Customs Act 2005 is amended as follows.
(2)
Section 18 (confidentiality) is amended as follows.
(3)
In subsection (2)—
(a)
omit “or” at the end of paragraph (g), and
(b)
after paragraph (h) insert “, or
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“(i)
which is made to the Scottish Ministers in connection
with the collection and management of a devolved tax
within the meaning of the Scotland Act 1998.”
(4)
After subsection (2) insert—
“(2A)
Information disclosed in reliance on subsection (2)(i) may not be further
25
disclosed without the consent of the Commissioners (which may be
general or specific).”
(5)
In section 19 (wrongful disclosure) in subsections (1) and (8) after “18(1)” insert
“or (2A)”.
(6)
In section 51 (interpretation) after subsection (2) insert—
30
“(2A)
But a reference to the functions of the Commissioners or of officers of
Revenue and Customs does not include a function which—
(a)
is conferred on them by or by virtue of an Act of the Scottish
Parliament or an instrument made under such an Act, and
(b)
relates to a devolved tax within the meaning of the Scotland Act
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1998.”
(7)
In section 1(1) of the Customs and Excise Management Act 1979
(interpretation), at the end of the definition of “assigned matter” insert “, except

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Part 3 — Finance
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that it does not include any matter relating to a devolved tax within the
meaning of the Scotland Act 1998;”.
Scottish rate of income tax
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Scottish rate of income tax
(1)
The 1998 Act is amended as follows.
5
(2)
Part 4 (power to vary income tax rate) is omitted.
(3)
In Part 4A (as inserted by section 24), after Chapter 1 insert—
“Chapter 2
Income Tax
80C
Power to set Scottish rate for Scottish taxpayers
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(1)
The Scottish Parliament may by resolution (a “Scottish rate resolution”) set
the Scottish rate for the purpose of calculating the rates of income tax to be paid
by Scottish taxpayers.
(2)
Section 6(2B) of the Income Tax Act 2007 provides for the calculation of those
rates.
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(3)
A Scottish rate resolution applies—
(a)
for only one tax year, and
(b)
for the whole of that year.
(4)
A Scottish rate resolution may specify only one rate.
(5)
The Scottish rate must be a whole number or half a whole number.
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(6)
A Scottish rate resolution—
(a)
must specify the tax year for which it applies,
(b)
must be made before the start of that tax year, and
(c)
must not be made more than 12 months before the start of that year.
(7)
If a Scottish rate resolution is cancelled before the start of the tax year for which
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it is to apply—
(a)
the Income Tax Acts have effect for that year as if the resolution had
never been passed, and
(b)
the resolution may be replaced by another Scottish rate resolution.
(8)
Standing orders must provide that only a member of the Scottish Government
30
may move a motion for a Scottish rate resolution.
80D
Scottish taxpayers
(1)
In any tax year, a Scottish taxpayer is an individual (T)—
(a)
who is resident in the UK for income tax purposes, and
(b)
who, for that year, meets condition A, B or C.
35
(2)
T meets condition A if T has a close connection with Scotland (see
section 80E).
(3)
T meets condition B if—

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(a)
T does not have a close connection with any part of the UK other
than Scotland (see section 80E), and
(b)
T spends more days of that year in Scotland than in any other
part of the UK (see section 80F).
(4)
T meets condition C if, for the whole or any part of the year, T is—
5
(a)
a member of Parliament for a constituency in Scotland,
(b)
a member of the European Parliament for Scotland, or
(c)
a member of the Scottish Parliament.
(5)
In this Chapter “the UK” means the United Kingdom.
80E
Close connection with Scotland or another part of the UK
10
(1)
To find whether, for any year, T has a close connection with any part of
the UK see—
(a)
subsection (2) (where T has only one place of residence in the
UK), or
(b)
subsection (3) (where T has 2 or more places of residence in the
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UK).
(2)
T has a close connection with a part of the UK if in that year—
(a)
T has only one place of residence in the UK,
(b)
that place of residence is in that part of the UK, and
(c)
for at least part of the year, T lives at that place.
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(3)
T has a close connection with a part of the UK if in that year—
(a)
T has 2 or more places of residence in the UK,
(b)
for at least part of the year, T’s main place of residence in the UK
is in that part of the UK,
(c)
the times in the year when T’s main place of residence is in that
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part of the UK comprise (in aggregate) at least as much of the
year as the times when T’s main place of residence is in any one
other part of the UK, and
(d)
for at least part of the year, T lives at a place of residence in that
part of the UK.
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(4)
In this section “place” includes a place on board a vessel or other means
of transport.
80F
Days spent in Scotland or another part of the UK
(1)
T spends more days of a year in Scotland than in any other part of the
UK if (and only if)—
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(a)
the number of days in the year on which T is in Scotland at the
end of the day

equals or exceeds
(b)
the number of days in the year on which T is in any other part
of the UK at the end of the day.
40
(2)
But T is not to be treated as being in the UK at the end of a day if—
(a)
on that day T arrives in the UK as a passenger,
(b)
T departs from the UK on the next day, and

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(c)
during the time between arrival and departure T does not
engage in activities which are to a substantial extent unrelated
to T’s passage through the UK.
80G
Supplemental powers to modify enactments
(1)
The Treasury may by order provide that subsections (2A) to (2C) of
5
section 6 of the Income Tax Act 2007 are to be disapplied, or that their
effect is to be modified, in relation to any enactment.
(2)
The Treasury may by order make such modifications of any enactment
as they consider necessary or expedient in consequence of or in
connection with—
10
(a)
the power of the Parliament to set a rate under section 80C;
(b)
the making of a Scottish rate resolution;
(c)
an order under subsection (1).
(3)
An order under subsection (2) may, in particular, provide that a
Scottish rate resolution does not require any change in the amounts
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repayable or deductible under PAYE regulations between—
(a)
the beginning of the tax year for which the resolution has effect,
and
(b)
such date (falling after the date of the resolution) as may be
specified in the order.
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(4)
An order under this section may, to the extent that the Treasury
consider it to be appropriate, take effect retrospectively from the
beginning of the tax year in which the order is made.
80H
Reimbursement of expenses
The Scottish Ministers may reimburse any Minister of the Crown or
25
government department for administrative expenses incurred by virtue of this
Chapter at any time after the passing of the Scotland Act 2011 by the Minister
or department.”
(4)
The repeal by subsection (2) of Part 4 of the 1998 Act has effect so that a tax-
varying resolution may not be passed so as to relate to any tax year following
30
such tax year as is appointed by the Treasury under this subsection (as the last
year for which that Part is to have effect).
(5)
A Scottish rate resolution made under the provisions inserted by subsection (3)
may not apply for a tax year preceding such tax year as is appointed by the
Treasury under this subsection (as the first year for which those provisions are
35
to have effect).
(6)
The tax year appointed under subsection (4) must precede the tax year
appointed under subsection (5).
(7)
Schedule 3 (which contains other amendments relating to the power to set a
Scottish rate of income tax) has effect.
40
27
Income tax for Scottish taxpayers
(1)
The Income Tax Act 2007 is amended as follows.

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(2)
In section 6 (the rates of income tax) after subsection (2) insert—
“(2A)
Subsection (2) does not apply to the non-savings income of a Scottish
taxpayer.
(2B)
The basic rate, higher rate and additional rate for a tax year on the non-savings
income of a Scottish taxpayer is to be found as follows.
5

Step 1

Take the basic rate, higher rate or additional rate determined as such under
subsection (2).

Step 2

Deduct 10 percentage points.
10

Step 3

Add the Scottish rate (if any) set by the Scottish Parliament for that year.
(2C)
Chapter 2 of Part 4A of the Scotland Act 1998 makes provision about
the meaning of “Scottish taxpayer” and the setting of the Scottish rate.”
(3)
In section 10 (income charged at particular rates: individuals) after subsection
15
(3A) insert—
“(3B)
If the individual is a Scottish taxpayer, the basic rate, higher rate and
additional rate are—
(a)
on so much of the individual’s income as is savings income, the
rates determined as such under section 6(2);
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(b)
on so much of the individual’s income as is not savings income,
the rates determined as such under section 6(2B).
(3C)
Section 16 has effect for determining which part of a Scottish taxpayer’s
income consists of savings income.”
(4)
In section 16 (savings and dividend income to be treated as highest part), in
25
subsection (1) before paragraph (a) insert—
“(za)
which part of a Scottish taxpayer’s income consists of savings
income,”.
(5)
In section 809H (charge on nominated income of long-term UK resident), after
subsection (3) insert—
30
“(3A)
For the purpose of calculating income tax charged under subsection (2),
ignore section 6(2A) to (2C) (special rates of income tax for Scottish
taxpayers).”
(6)
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary
statutory effect of resolution of House of Commons), after subsection (3)
35
insert—
“(3A)
If a resolution specifies the basic rate, higher rate or additional rate of
income tax, the resolution has effect in relation to Scottish taxpayers
(within the meaning of Chapter 2 of Part 4A of the Scotland Act 1998)
as if it specified the rate calculated in accordance with section 6(2A) to
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(2C) of the Income Tax Act 2007.”
(7)
The amendments made by this section have effect in relation to the tax year
appointed by the Treasury under section 26(5) and subsequent tax years.