I asked a question re Income Tax in the event of Scotland gaining independence. I live in Scotland but work in England, the following is the answer?
Thank you for the question on taxation which you submitted to the scotreferendum website.
The Scottish Government published Scotland's Future - Your Guide to an Independent Scotland on 26 November. Scotland's Future sets out the gains of independence for Scotland and explains the process by which Scotland will become independent following a Yes vote and how a newly independent Scotland will work. You can read and order a copy of Scotland's Future at http://www.scotreferendum.com/.
As set out in the answer to Question 37 on page 388 of Scotland's Future, the Scottish Government will build on the existing definition set out in the Scotland Act 2012 and general international protocols to establish a definition of a Scottish taxpayer based on residence. In general, this means that people who live in Scotland for most of the year will pay their taxes here. Where people split their time between Scotland and other countries, including England, Wales and Northern Ireland, there will be clear rules set out in statute to determine which tax authority they pay their taxes to.
The Scottish Government will seek a double taxation agreement with the Westminster Government following a vote in favour of independence which clearly allocates taxing rights over all forms of income based on residence. This will ensure that people with earnings in one country and who reside in the other are not taxed twice on the same income, gains or transactions. It will be in the interests of both Scotland and the rest of the UK to arrive at a double taxation agreement that ensures that the tax affairs of individuals who incur tax charges in one country and reside in the other are as simple and predictable as possible.
The passing of the Scotland Act 2012 means that by 2016, whatever the result of the referendum, there will be differences in the tax systems in Scotland and other parts of the UK. With the full powers of independence, we have the opportunity to create a simpler tax system in Scotland which meets Scotland’s needs and reduces the compliance burden for taxpayers.
Independence will provide the Scottish Parliament and Government with the powers to set tax rates which are right for Scotland, allowing Scottish Ministers to develop policies that will deliver sustainable economic growth and a fair society. More detailed information on the current government’s taxation priorities and the use of tax powers can be found in Chapter 3 of Scotland's Future (at pages 117-123) and in the Taxes and Taxation pages on the Questions and Answers section of the Scotland’s Referendum website.
