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Confusion over responsibility

Scots struggle with devolved taxes – but favour car park levy

Scottish Parliament Holyrood

Scottish Parliament: still a mystery to many Scots (pic: Terry Murden)

Scots are struggling more than ever to understand how devolved tax powers work, according to the latest research.

It also found that the public is broadly in favour of both a workplace car parking tax and a tourist tax – despite Tory MSPs dubbing the workplace levy a “hated” tax.

The 2019 poll of Scottish public understanding and awareness of devolved taxes, carried out for the Chartered Institute of Taxation (CIOT, found that 91% had little or no understanding of the definition of a Scottish taxpayer, an increase of 7 percentage points compared to 2018.

The survey also revealed that 86% think they need better information about how taxes are decided in Scotland. While this figure was broadly similar with the 84% who gave a similar response in 2018, there was a net drop of six percentage points in the number of Scots who said that the relationship between Scottish and UK taxes was ‘easy to understand’

Fewer people correctly understand that responsibility for income tax is shared between Holyrood and Westminster, down from 34% in 2018 to 26% this year. Nearly half of Scots (48%, up from 41% in 2018) now think income tax is set wholly by the Scottish Parliament

The number of people who think that the fully devolved Land and Buildings Transaction Tax is set by Westminster has risen from 24% to 28%.

The survey also found broad support for the Scottish Government’s proposals to give councils the power to introduce new taxes on tourists and car parking.

Opinion was split almost evenly between those who thought the taxes should be set and controlled by Holyrood (32%) and those who support local council control (37%).

This poll confirms that a lot of work still needs to be undertaken to improve the public’s understanding of tax

– Alexander Garden, CIOT

Excluding those who opposed the Scottish government having the power to introduce new taxes, and those who did not express an opinion, a majority of respondents in the East of Scotland preferred that the taxes be set locally (55%), while a majority in the West thought they should be set and controlled by Holyrood (54%).

The poll also found that 45% of Scots believe that the amount of income tax they pay has gone up in recent years, an increase of 6% on 2018. The percentage of respondents agreeing to this increased the higher on the income scale they were placed2.

Commenting on the findings, Alexander Garden, chairman of the Chartered Institute of Taxation’s Scottish Technical Committee, said: “Devolution has changed the Scottish tax system, but this poll confirms that a lot of work still needs to be undertaken to improve the public’s understanding over how tax responsibilities are split between Holyrood and Westminster.

“That public awareness has shown signs of waning compared with last year suggests that the initial publicity surrounding these changes has started to wear off.

“These figures should provide both the Scottish Government and HMRC with the impetus to renew their efforts to communicate tax changes to the general public.

“A lack of understanding of tax is not a uniquely Scottish issue, but changes in the way that taxes are administered in Scotland in recent years, together with the increasing complexity of the regime and the prospect of further divergence make it ever more important to ensure that taxpayers understand where responsibility and accountability rests”.

Pollster Mark Diffley added: “This is the second survey among Scots about awareness of and attitudes towards different taxes, allowing us to begin to establish trends over time.

“The data highlights that awareness of which parliament has different tax raising powers is both low and has declined from last year, suggesting that awareness level last year may have been linked to publicity surrounding the changes. It also points to the need for governments to undertake more aware raising activity to ensure the public has greater understanding of this important issue.”

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