The Scottish Draft Budget for 2017–18 was presented to Holyrood on 15 December 2016 by Scottish Finance Secretary. The Budget sets out Scotland’s tax and spending plans for the upcoming year.

The Budget saw the first divergence between the income tax positions of Scottish and other UK taxpayers, with a proposal to increase the higher rate tax threshold in 2017 by inflation to £43,430 rather than to follow the UK Government’s planned increase to £45,000.

The National Audit Office has recently published its report into the administration of the Scottish Rate of Income Tax (“SIRT”) (2015–16).

According to the report, HMRC face significant challenges in administering SRIT, particularly when tax rates and thresholds differ between Scotland and the rest of the UK. It is crucial that it maintains accurate address information for Scottish taxpayers, and ensures that the potential for tax avoidance and evasion is mitigated. HMRC also needs to be able to report the actual amount of SRIT collected to the Scottish Government, and provide an IT solution that allows private pension providers to claim relief at source.