The Scottish variable rate (SVR) was a mechanism which would have enabled the Scottish Government to vary (down or up) the basic rate of

UK income tax Taxation in the United Kingdom may involve payments to at least three different levels of government: central government (HM Revenue & Customs), devolved governments and local government. Central government revenues come primarily from income ...

by up to 3p in the pound. The power was never used (and indeed was allowed to lapse by the Scottish Government in 2007) and was succeeded by the legislative framework for Scottish public finance in the Scotland Act 2012, which gives the Scottish Parliament the power to set a Scottish rate of income tax. When legislating for the

Scottish Parliament The Scottish Parliament ( gd, Pàrlamaid na h-Alba ; sco, Scots Pairlament) is the devolved, unicameral legislature of Scotland. Located in the Holyrood area of the capital city, Edinburgh, it is frequently referred to by the metonym Holy ...

, a number of matters were reserved by the

UK Parliament The Parliament of the United Kingdom is the Parliamentary sovereignty in the United Kingdom, supreme Legislature, legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of We ...

at Westminster. One such reserved matter was

taxation A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, o ...

; however, this had been a key point in Scottish negotiations relating to parliamentary control. As a means of compromise, Westminster afforded the Scottish Parliament the ability to vary income tax, which was subsequently given the consent of the

Scottish electorate Scotland has elections to several bodies: the Scottish Parliament, the United Kingdom Parliament, local councils and community councils. Before the United Kingdom left the European Union, Scotland elected members to the European Parliament. Sco ...

in the second question of the 1997 devolution referendum. Therefore, the

Scotland Act 1998 The Scotland Act 1998 (c. 46) is an Act of the Parliament of the United Kingdom which legislated for the establishment of the devolved Scottish Parliament with tax varying powers and the Scottish Government (then Scottish Executive). It was o ...

granted the Scottish Parliament the power to vary

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

by ±3p in every

pound Pound or Pounds may refer to: Units * Pound (currency), a unit of currency * Pound sterling, the official currency of the United Kingdom * Pound (mass), a unit of mass * Pound (force), a unit of force * Rail pound, in rail profile Symbols * Po ...

. This power was often referred to as the tartan tax, a phrase first used by Conservative financier and politician Michael Forsyth as a way of attacking the power, using the idea of '

tartan Tartan ( gd, breacan ) is a patterned cloth consisting of criss-crossed, horizontal and vertical bands in multiple colours. Tartans originated in woven wool, but now they are made in other materials. Tartan is particularly associated with Sc ...

' to get across the idea that it would be an extra tax on Scots alone.Tartan Tax
History Channel However, the phrase "tartan tax" would only correctly apply if the tax were varied upwards – no phrase was ever suggested if the tax were varied downwards.

References

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References

See also