26 May 2010

I'm getting too old for this ...

Gerry Hassan of The Scotsman gives you the complicated version:
Scottish Secretary Danny Alexander and David Mundell, his deputy, have made it clear where they stand on the Calman tax powers. They have gone out of their way to give no clear "commitment" to implement the powers, while also saying that it was their eventual "intention" to do so if everything goes according to plan. They underlined as pivotal in this, discussions with the Treasury and Scottish Government. It is no coincidence that these are two of the biggest opponents of the Calman tax powers for opposing reasons: the Treasury because they see them as a threat and too radical, and the SNP because they don't think they go far enough.
The Calman tax powers are arguably the most ill-conceived proposals ever put together in modern Scotland. They would damage Scotland's finances and economy, not increase fiscal autonomy; undermine fairness and not in any way advance transparency. Importantly, for a pro-Unionist document, they would exasperate [exacerbate?] potential conflict between the Scots and UK governments over assessing the Scots tax take, crucial in how you estimate how much of the block grant the UK government withholds.

Me, I'm a more simple soul. I have never been convinced that HM Revenue and Customs have the practical means to collect differential rates of income tax according to geographical residency. (I appreciate that the Scotland Act provides, within limits, for just such differential rates, but has the Treasury ever done anything to amend its systems to provide for this?) Calman would open the door to even greater differentiation. And, even if HMRC were able to deliver, would the systems of the larger cross-border companies such as Tesco or M&S be able to make differential deductions from staff salary payments? My pension is paid from Newcastle under a UK scheme; I pay a certain amount of income tax every month. But I very much doubt if the payer has a system which can tolerate making a different percentage deduction from my pension than from my counterparts down south.

Nothing is impossible, so they say. But it would not be easy and it would probably be expensive. In the meantime, I have yet to see any appreciation of the practical problems of implementing Calman. But let us wait and see.

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