Finance minister Derek Mackay MSP is due to publish the draft Budget 2017/18 plans for the Scottish finances for financial year 2017/18 on 15 December. The yearly budget process requires all committees to consider the draft budgets relevant to their particular remits and to report to the Finance Committee. The measures are subsequently debated by the Scottish parliament early in 2017 with a view to passing the Bill by late February.

This follows the introduction of the Scottish Rate of Income Tax in April 2016, which created a system to divide income tax proceeds between the UK and Scottish governments.

The change meant that all Scottish residents were issued with an ‘S’ tax code and they were liable to inform their employers and/or HMRC depending on employment status of whether they were resident in Scotland on a permanent basis and thus liable for SRIT.

From April 2016, the Scottish parliament was able to set its own rate of income tax under the Scotland Act 2012 and had the powers to alter rates by up to 10% versus the UK national rate. At the time, the Scots decided not to change the rates so they are currently aligned with the rest of the UK.

It is estimated that there are 2.6m Scottish taxpayers, while implementation of the new tax code cost £35m.

From April 2017, the Scottish government will be able to set income tax rates for Scotland outwith the UK tax system, although the revenue will continue to be collected by HMRC.

The decision to abandon the annual Autumn Statement in favour of a more streamlined approach will see the UK move to a single annual Budget each autumn, with a subsequent Finance Bill early in the following year. There will be a transition period which will see two Budgets in 2017.

The change at Westminster level will have implications for the Scottish Budget process.

Moira Kelly, chair of the CIOT Scottish technical committee said: ‘Despite the devolution of a range of tax raising powers to the Scottish parliament, the Scottish budget making process remains heavily dependent on the interactions with – and implications of – decisions taken at Westminster.

‘The decision will clearly have implications for future Scottish fiscal events and in particular, the timing of future draft Scottish Budgets.

‘If the UK Budget is to be moved to the autumn, then the Scottish Government may feel pressure to ensure their draft Scottish Budget is prepared after the UK fiscal event, as was the case in 2015 and 2016, and potentially resulting in inadequate time with which to scrutinise the Scottish budget.’