The Treasury draws on our devolved tax forecasts when making decisions about block grants in accordance with the Scottish and Welsh Governments’ fiscal frameworks. The OBR has no direct involvement in these block grant decisions or adjustments. From April 2019 we have taken on direct responsibility of scrutinising the Welsh Governments forecast.

Devolution of fiscal powers to the Scottish Parliament and the Welsh and Northern Irish Assemblies

The process of fiscal devolution to Scotland, Wales and Northern Ireland began in 1998 with the passing of a Scotland Act, a Government of Wales Act and a Northern Ireland Act. These set up the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly. The timeline below shows of some of the key devolution milestones since then, including some significant recent and forthcoming changes.

devolved timeline no future shading-01


Scotland

Alongside the Scotland Bill 2012, which set out plans to devolve taxes to the Scottish Parliament, the Government produced a Command Paper which asked us to produce forecasts for Scottish income tax, stamp-duty land tax, landfill tax and aggregates levy. Since then we have been publishing Scottish tax forecasts alongside each of our main UK forecasts. Our Chairman also gives evidence to the Scottish Parliament Finance Committee. In April 2015, the Government fully devolved stamp duty and landfill tax to Scotland. Following the passing of the Scotland Act 2016 we now also forecast Scottish air passenger duty and aspects of Scottish social security.

For more background information and to download the relevant forecasts, legislation and our Chairman’s evidence see our Scottish Government tax and spending forecasts page


Wales

In a Command Paper published with the Wales Bill 2014, the Government requested that we produce Welsh forecasts alongside each Economic and fiscal outlook. Since December 2014 we have been forecasting the Welsh rate of income tax, stamp-duty land tax, landfill tax and aggregates levy and our Chairman also gives evidence to the Welsh Assembly Finance Committee.

We also provide the Welsh Government with independent scrutiny of its forecasts in the Welsh taxes outlook.

For more background information and to download the relevant forecasts, legislation and our Chairman’s evidence see our Welsh Government tax forecasts page


Northern Ireland

An agreement is in place to devolve corporation tax to Northern Ireland though the exact timing remains uncertain.

For more background information and to download the relevant legislation see our Northern Ireland Executive tax forecasts page.