The Scottish variable rate (SVR) was a mechanism which would have enabled the

Scottish Government The Scottish Government (, ) is the executive arm of the devolved government of Scotland. It was formed in 1999 as the Scottish Executive following the 1997 referendum on Scottish devolution, and is headquartered at St Andrew's House in ...

to vary (down or up) the basic rate of

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

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 The Scotland Act 2012 is an Act of the Parliament of the United Kingdom. It sets out amendments to the Scotland Act 1998, with the aim of devolving further powers to Scotland in accordance with the recommendations of the Calman Commission. It ...

, which gives the Scottish Parliament the power to set a Scottish rate of income tax. When legislating for the

Scottish Parliament The Scottish Parliament ( ; ) is the Devolution in the United Kingdom, devolved, unicameral legislature of Scotland. It is located in the Holyrood, Edinburgh, Holyrood area of Edinburgh, and is frequently referred to by the metonym 'Holyrood'. ...

, a number of matters were

reserved Reserved is a Polish apparel retailer headquartered in Gdańsk, Poland. It was founded in 1999 and remains the flagship brand of the LPP (company), LPP group, which has more than 2,200 retail stores located in over 38 countries and also owns su ...

by the

UK Parliament The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body of the United Kingdom, and may also legislate for the Crown Dependencies and the British Overseas Territories. It meets at the Palace of ...

at Westminster. One such reserved matter was

taxation A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...

; 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 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. 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 or plaid ( ) is a patterned cloth consisting of crossing horizontal and vertical bands in multiple colours, forming repeating symmetrical patterns known as ''setts''. Originating in woven wool, tartan is most strongly associated wi ...

' to get across the idea that it would be an extra tax on Scots alone.Tartan Tax Tax Varying Powers for a Scottish Parliament
p. 15 House of Commons Library, 31 October, 1997

References

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References

See also