Moving Budget to Autumn has implications for Scottish Government, say tax experts

The Chartered Institute of Taxation (CIOT) in Scotland has welcomed the Chancellor’s announcement to abolish the Autumn Statement, and move the Westminster Budget from spring to autumn, but warned of its implications for the ongoing budget review process in Scotland.

The CIOT, along with the Institute for Government (IfG) and Institute for Fiscal Studies (IFS), had called for the UK Government to revert to a single fiscal event in an open letter to Philip Hammond in September this year.  The letter contained some early recommendations from a project the three organisations are undertaking to look at how to improve tax policy making, which will report in January 2017.

In Scotland, a tripartite Budget Process Review Group was established in September comprising representatives of the Scottish Government, Scottish Parliament and wider civic society, to review the Parliament’s budget process following the devolution of further tax raising powers.

Commenting on the decision, Moira Kelly, Chair of the CIOT Scottish Technical Committee said:

“Tax change is one of the greatest causes of complexity in the tax system, so the Chancellor’s decision to revert to a single fiscal event is to be welcomed.

“Despite the devolution of a range of tax raising powers to the Scottish Parliament, the Scottish budget making process remains heavily dependent on the interactions with – and implications of – decisions taken at Westminster.

“Today’s decision will clearly have implications for future Scottish fiscal events and in particular, the timing of future draft Scottish Budgets.

“If the UK Budget is to be moved to the autumn, then the Scottish Government may feel pressure to ensure their draft Scottish Budget is prepared after the UK fiscal event, as was the case in 2015 and 2016 and potentially resulting in inadequate time with which to scrutinise the Scottish budget.

“As it continues its work, the Budget Process Review Group may wish to consider what impact today’s decision will have on the timetabling for future Scottish budgets and their interaction with the UK process.”

ENDS

Notes for editors

The letter to the Chancellor can be read in full here.

The Government briefing note on the change states: “Businesses, economy and tax experts like the International Monetary Fund, Institute for Government, the CBI, Chartered Institute of Taxation and the IFS have all been calling for this change. It will mean businesses and people face less frequent changes to the tax system, helping to promote certainty and stability.”

The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Chris Young, External Relations Officer, 07900 241 584 cyoung@ciot.org.uk