How Westminster strangles Scotland through tax policy
It’s easy to vilify Holyrood for imposing higher income tax rates than England, but income tax is the only tax from which it can raise revenue. And that was a deliberate tactic by Westminster when devolution was being set up because of all taxes, income tax is one of the most hated.
Westminster has consistently denied Scotland any real borrowing power. Furthermore, the VAT Scotland collects - VAT isn’t devolved - goes straight down to London. VAT is a regressive tax that hits the poorest hardest. Because the poor have a propensity to spend most of their income, they pay proportionally more VAT than the wealthy do, who have a propensity to hoard.
So the VAT Scotland collects because of higher spending by the poor can’t be used here to alleviate inequality and poverty. And that’s precisely why Westminster rigged the system.
Raising income tax also gives the unionists a handy stick with which to beat the Scottish administration when it ‘overtaxes’ those in the middle compared to the rest of the UK.
The British State does everything it can to strangle Scotland and its potential lest the Scottish People wake up to what this so-called union is - a giant con designed to loot their wealth and keep them down and out. Let’s end this farce now.
A major factor underlying the current treatment of VAT is that nobody knows how much VAT is raised in Scotland because VAT registration is framed on a UK-wide basis: there are no Scotland-specific VAT Registration numbers and many businesses operating in Scotland have their UK headquarters elsewhere in the UK, predominantly in England. Take M&S as an example: it has branches in all 3 of the devolved nations but has a single UK-wide VAT Registration Number for its retail activities. The VAT content of sales is aggegated at M&S Admin HQ as a single figure. Likewise the VAT paid on the purchase of goods for sale is a single UK figure offset against the VAT from all sales, so HMRC never see the VAT deriving from individual UK nations; they're simply not interested in it - another case of UK=England. I suspect M&S might be able to break it down to inidividual stores, but that's a matter for management controls, not a fiscal matter.
The outcome of this is that HMRC estimates VAT raised in Scotland, and inevitably, over time, discrepancies arise which require retrospective adjustment (which will of course also be estimated). This therefore affects Scot Gov budgeting massively by forcing use of guesstimates ahead of the fiscal year in question and in later years after the event. Scot Gov Administration time and costs are increased as significant guesswork is "corrected", but, since nobody knows what the real figures should be, even the corrections are guesses. It's a bit like Alice Through the Looking Glass, yet it could all be sorted if an S, W, or NI could be added to the VAT number to enable separation of VAT data for the devolved nations.
Once again Leah, bang on the money!!