Review will have impact on Scottish business
The Spending Review delivers significant real-terms increases to Scottish Government capital budgets. Funding available for infrastructure investment via the block grant through to 2020-21 will rise by 14%, meaning more than £1.9 billion more spend than if it had been held at 2015-16 levels.
There were some other Scotland specific announcements and updates:
- Implementation of the City Deal for Glasgow and the Clyde Valley is now well under way and headline proposals have been received from local partners for Aberdeen and Inverness.
- £7 million of funding through the Regional Air Connectivity Fund to support new air routes promoting domestic and international connectivity and stimulating jobs and growth, including from Dundee to Amsterdam and from Edinburgh to Oxford.
- £5 million of funding will also go towards the Burrell Renaissance project. This will support the collection going on tour, as well as refurbishment of the Grade A listed museum in Glasgow.
Of the UK wide tax changes, there will be a levy (paid through PAYE) for the largest employers from April 2017 to help fund apprenticeships across the UK. This will be charged at 0.5% of an employer’s salary costs.
There will be a £15,000 allowance which will mean that the levy will only be paid by employers with salary costs of more than £3 million. It is anticipated that less than 2% of UK employers will therefore pay the levy.
There were further changes to the private rental sector with a 3% additional Stamp Duty Land Tax charge being introduced for second properties costing more than £40,000 and an acceleration of the tax payment date from 30 days to 15 days.
Although these rules apply to non-Scottish property sales (Scotland now has the Land & Buildings Transactions Tax overseen by Revenue Scotland), it is possible the Scottish Government could choose to bring in similar changes.
The Scottish Parliament budget has been confirmed for 16 December and this is when we expect the announcement on the Scottish rate of Income Tax (SRIT). SRIT applies by reducing the rate of income tax applying on non-savings income of Scottish taxpayers by 10% across basic rate, higher rate and additional rate and adding the Scottish Rate applicable for the year. There is no indication that the rate will be anything other than 10% but we shall find out soon.
The Scotland Bill, which contains significant further tax and spending powers, recently passed its final stage in the House of Commons and is on track to receive Royal Assent in early 2016. Discussions on the accompanying fiscal framework are ongoing, with the Joint Exchequer Committee having met four times since May.
Caroline Muir is Tax Director in the Edinburgh Office of Johnston Carmichael
Autumn Statement Webpage: http://www.jcca.co.uk/autumn-statement-2015/