Scotland Bill

18: After Clause 27, insert the following new Clause— ““Changes to United Kingdom income tax which are detrimental to the income of the Scottish Government (1) In this section, a ““change to the United Kingdom income tax system”” refers to any change to the operation of personal income taxation in the United Kingdom, including but not limited to personal allowances and tax rates, introduced by an Act passed by Parliament. (2) The Office for Budget Responsibility shall assess the impact of each change to the United Kingdom income tax system and publish its assessment of whether the change decreases the total income tax take. (3) In preparing a report under subsection (2), the Office for Budget Responsibility shall choose the number of years in which it wishes to assess the impact of each change to the United Kingdom income tax system. (4) If any assessment conducted under subsection (2) indicates that the United Kingdom Government's income tax take in any tax year will decrease, then— (a) there shall be no related increase in grant funding provided to the Scottish Government; (b) a Scottish rate resolution under section 80C of the Scotland Act 1998 may not be passed or replaced solely to reflect any consequent decrease in income accruing to the Scottish Government; (c) the Scottish Parliament may by resolution (a ““Scottish allowance resolution””) adjust the personal allowances set out in sections 35 to 37 of the Income Tax Act 2007 to increase the income of the Scottish Government up to the level it would have been prior to the change assessed in the report made under subsection (2). (5) A Scottish allowance resolution made under subsection (4)(c)— (a) applies for only one tax year, and for the whole of that year, (b) must specify the tax year for which it applies, (c) must be made before the start of that tax year, (d) should set personal allowances for each of sections 35, 36 and 37 of the Income Tax Act 2007, and set no other allowances, and (e) may only apply to a tax year which has been the subject of a published assessment by the Office for Budget Responsibility in a report prepared under subsection (2). (6) If a Scottish allowance resolution is cancelled before the start of the tax year for which it is to apply— (a) the Income Tax Acts have effect for that year as if the resolution had never been passed, and (b) the resolution may be replaced by another Scottish allowance resolution. (7) Standing orders must provide that only a member of the Scottish Government may move a motion for a Scottish allowance resolution. (8) The provisions of subsection (4)(a) and (b) shall apply to any tax year that has been the subject of an assessment conducted under subsection (2). (9) The Income Tax Act 2007 is adjusted as follows. (10) In section 35 (personal allowance for those aged under 65), at the end insert— ““(5) If the individual is a Scottish taxpayer under Chapter 2 of Part 4A of the Scotland Act 1998 then the personal allowance in subsection (1) may be adjusted to any amount set out by the Scottish Parliament in a Scottish allowance resolution. (6) Section (Changes to United Kingdom income tax which are detrimental to the income of the Scottish Government) of the Scotland Act 2012 makes provision about the setting of the personal allowance for Scottish taxpayers.”” (11) In section 36 (personal allowance for those aged 65 to 74), at the end insert— ““(4) If the individual is a Scottish taxpayer under Chapter 2 of Part 4A of the Scotland Act 1998 then the personal allowance in subsection (1) may be adjusted to any amount set out by the Scottish Parliament in a Scottish allowance resolution. (5) Section (Changes to United Kingdom income tax which are detrimental to the income of the Scottish Government) of the Scotland Act 2012 makes provision about the setting of the personal allowance for Scottish taxpayers.”” (12) In section 37 (personal allowance for those aged 75 and over), at the end insert— ““(4) If the individual is a Scottish taxpayer under Chapter 2 of Part 4A of the Scotland Act 1998 then the personal allowance in subsection (1) may be adjusted to any amount set out by the Scottish Parliament in a Scottish allowance resolution. (5) Section (Changes to United Kingdom income tax which are detrimental to the income of the Scottish Government) of the Scotland Act 2012 makes provision about the setting of the personal allowance for Scottish taxpayers.””””