That is because the evidence is that when the whole of the UK offered a 0% starting rate of corporation tax it encouraged a wave of small business incorporation. I stress, these were new business incorporations, they were not new small businesses. The reality is that the vast majority of genuine small businesses not already set up for tax abuse purposes (as so many so called consultancies that disguise the reality of an employment are) are in fact unincorporated. This pays in all sorts of ways for most genuine small enterprises. But if they’re offered a 0% tax rate you can be sure they’ll incorporate in droves. And they’ll be new companies. So they will qualify for the new rate. And they will avoid income tax as a result.
I can’t tell you how much this will cost precisely, because no one knows. I can assure you that there will be a significant cost. It is already thought tax motivated incorporation costs the UK as a whole about £3 billion a year now, meaning £200 million is likely in Scotland. It is reasonable to think a loss considerably in excess of this would result from the Reform Scotland plan.
Now who was it that wrote a newspaper article suggesting that you do this for your nanny?
Ah, yes, the same person who actually did this himself.
Still, at least we’ve an area of tax that Snippa actually knows something about.