21 November 2012 Last updated at 10:33 ET

New Scottish tax power could cost £45m to establish

The cost of setting up the system to deal with Scotland's beefed-up financial powers has been put at up to £45m, MSPs have heard.

Ministers at Holyrood will get new responsibility for setting the tax, under the Scotland Act, in 2016.

The parliament's audit committee heard that setting up the collection system would cost an estimated £40m-£45m, with annual £4.2m running costs.

The tax power is due to come into force just before the next Holyrood election.

It will see income tax in Scotland reduced by 10%, with the Scottish Parliament responsible for deciding whether to keep tax rates the same as the rest of the UK, put them up or cut them.

The point of the new powers, being devolved from Westminster, is to make Scotland more accountable for the cash it spends.

Edward Troup, who has responsibility for the collection of the Scottish rate of income tax at HM Revenue and Customs, told the committee: "If there were to be a change of the Scottish rate that would incur a cost, the arrangements are quite clear any additional cost which is expressly attributable to the Scottish rate should be for the Scottish government to bear."

Scottish Conservative leader Ruth Davidson has already said her party would want to reduce income tax in Scotland by one pence in the pound.