TAX NEWS - JUNE 2010

Scotland Tax: Business groups in spat over tax-raising powers

by Robbie Dinwoodie, 03 Jun 2010 -- Scotland's two leading business organisations have clashed over whether the Scottish Parliament should have enhanced financial powers that go beyond the Calman proposals.

Banker Ben Thomson and industrialist Jim McColl will today launch the Campaign for Fiscal Responsibility with the declaration that "a Scottish Parliament with far greater responsibility for raising the money it spends would lead to better government".

Yesterday, as reported in The Herald, a similar plea was agreed by the political odd couple of Grahame Smith of the Scottish TUC and David Watt of the Institute of Directors (IoD) – as well as the Kirk and the voluntary sector.

Now CBI Scotland director Ian McMillan has launched a thinly veiled attack on the IoD for joining the "devolution max" side of the argument. "Some business leaders appear collectively to be calling for fiscal autonomy for Scotland," he said.

"I have the utmost respect for these people, but fiscal autonomy means the UK's unitary tax system would become fragmented and businesses' compliance costs would increase as a result. Scotland tax income would need to cover our all expenditure, which currently it does not."