When it was set up in 1999, Holyrood was given the power to vary income tax by 3p in the pound – but it it has never been used.
Nevertheless, the parliament’s fiscal powers have expanded significantly since then.
It took on landfill tax and Stamp Duty from April 2015, replacing the latter with the Land and Buildings Transaction Tax (LBTT).
Holyrood also took on the power to set a Scottish Rate of Income Tax from April 2016. This gives MSPs control over 10p in the pound from the basic, higher and additional rates of income tax – although to date, they have chosen to stick with the rate charged in the rest of the UK.
The Scotland Act 2016 added significant new powers over tax. Under the existing setup, MSPs had the power to raise funds representing less than 10% of the money Holyrood spends each year. Once all the new provisions are in force that will rise to 36% – and if assigned revenue from VAT is added in 2019/20, it will be 48%.
This includes, from April 2017, the power to set rates and bands of income tax on non-savings and non-dividend income. In his first budget as finance secretary, Derek Mackay chose not to vary rates – but did set a different threshold for the higher 40p rate.
A borrowing limit first introduced in 2012 rose to £3bn for capital projects and £600m per year for resource spending, up to an overall limit of £1.75bn.
What the Scottish government won’t be able to do is alter the rates of National Insurance and VAT, two of the big sources of public revenue.
Westminster has also retained the power to set the personal allowance for income tax, the point at which people start paying tax, as well as corporation tax – although there are plans to devolve the latter to Northern Ireland.