Devolved government finances

For the new 2018–19 tax year, the Scottish higher-rate threshold has fallen further behind that in the UK, and two new income tax bands have been added in Scotland while the higher- and additional-rates have been increased. While most Scots will be either unaffected or pay slightly less in tax, overall the change will raise revenue as a result of higher earners paying more. This observation argues that while these changes represent small tweaks to the system rather than a major overhaul, differences between the Scottish and UK income tax systems could have significant implications for taxpayer behaviour going forward.

From tomorrow, Scottish residents will for the first time be subject to a different income tax schedule from those resident elsewhere in the UK. This is because of the Scottish parliament’s decision to use recently devolved powers over income tax bands and rates for non-savings and non-dividend income to freeze the higher-rate threshold (the point at which the rate of income tax rises from 20% to 40%) for the new financial year. Doing so exacerbates some existing deficiencies that afflict the tax system throughout the UK, and highlights the continuing need for tax reform.

Welsh funding: Assessing the fiscal framework deal

The fiscal framework and the Scottish budget process: some thoughts

In yesterday’s English Provisional Local Government Finance Settlement, the government announced councils will be able to set a ‘Social Care Precept’ of 3% a year over the next two years, rather than the 2% a year previously planned, to raise additional funds for adult social care. We calculate that yesterday’s announcements could increase the amount available to spend on adult social care by a maximum by £700 million over the next two years relative to previous plans. But they provide no boost to spending beyond that.

Last month, researchers at the Institute for Fiscal Studies launched first paper the from a new programme on local government finance. This paper looked at a range of issues including, changes in councils’ spending and revenues over the last seven years, and issues related to the evolving English business rates retention scheme (BRRS). Today, we publish two spreadsheets with information for individual council areas: a spreadsheet showing changes to councils’ spending on services between 2009–10 and 2016–17; and a spreadsheet showing relative gains and losses from the BRRS since it was introduced in 2013–14.

What if the Welsh Government raises or cuts taxes? Implications for revenues and behaviour

Presentation given at the IPFIN 2016 conference - which brings together researchers from the Welsh and Northern Irish Assemblies and the Scottish and

Presentation given to the Welsh Assembly Finance Committee discussing the background to good tax design, tax devolution, and the need for a new fiscal framework (including adjustments to block grant funding) to accompany tax devolution.