Scottish Tax - changes for 2023 to 2024: ready reckoners

Introduction

A core tax principle of the Scottish Government is to engage with citizens and taxpayers and increase the understanding of tax policy in Scotland.^[4] As part of this approach, the Scottish Government has published Income Tax 'ready reckoners' annually since March 2021, in line with similar publications by HMRC and the Welsh Government^[5]. These are intended to assist researchers and policymakers, to improve transparency and further facilitate public understanding in this area. This year, the Scottish Government has expanded the publication to cover a broader set of ready reckoners, including information on Residential and Non-Residential LBTT, and Non-Domestic Rates.

The ready reckoners in Table 1 provide an order of magnitude of how much revenue could be raised, or foregone, over and above the policy changes already made for 2023-24. They are not intended to be exhaustive but can be used to understand the impacts of tax policy proposals on the Scottish Budget.

They have been produced by Scottish Government analysts using in-house economic models that are in line with the SFC's generalframework and assumptions for policy costings, as set out in detail by the SFC in May 2021^[6]. In practice, the SFC costs policies on a case-by-case basis, considering the details of each individual policy and the wider economic context. The ready reckoners in the table should therefore be used to provide only an indication of the revenue impacts, as the SFC's final policy costings could be different.

The ready reckoners also only show the direct impact on Scottish Tax liabilities and receipts and do not include any wider effects on the Scottish economy, other devolved or local receipts, or UK Government revenues. Some behavioural responses, such as decisions whether to work or not; whether to re-locate to or from other parts of the UK or the world or buying a different property, for example, are captured for Income Tax, and residential and non-residential LBTT but not for NDR.