Pay, Tax and Employment History requests through the ADL - HMRC note

6 Jul 2017

The Committee invited CIOT to give oral evidence to the Committee at a meeting in April, and also requested an additional written submission focussing on the issue of incorporation and the potential impact on the Scottish Budget if there is a change in the rate of income tax in Scotland.

Our submission focuses on the tax differences between operating a business through a sole trade or a limited company, while noting that incorporation can be motivated by a variety of non-tax factors. It also considers the tax issues peculiar to Scotland, as a result of the devolution of powers over income tax rates and bands for non-savings non-dividend income.

In terms of income tax, we considered the possible effects if there is a change in the rate of Scottish income tax, giving examples of possible behavioural changes. We also note other factors that taxpayers are likely to consider, including whether or not a change will be long-term and therefore have an ongoing impact.

Technical Team