THE business community and public are unprepared for the introduction of a new Scottish rate of income tax, experts will warn MSPs.

Organisations have told Holyrood's finance committee that there is a large amount of confusion and unawareness over the historic change, which will come into force within months.

From April next year, Scottish taxpayers will have their main income tax rate reduced by 10p, with Holyrood setting a single across the board levy in its place. The Scottish Parliament will be able to keep the Scottish Rate of Income Tax (SRIT) at 10p, meaning tax would remain the same as the rest of the UK, or increase or decrease the Scottish rate.

The changes will have serious implications for businesses, which will be responsible for applying new tax codes and changing computer systems, while in a minority of cases it may be unclear who qualifies as a Scottish taxpayer.

The major overhaul, brought in as part of the 2012 Scotland Act, is set to come under the microscope at the Scottish Parliament today, with the Finance Committee to hear evidence from a series of organisations and individuals with an interest in the changes.

The Chartered Institute of Taxation said an effective communications campaign was essential if there was to be a smooth transition, but raised fears that awareness remained inadequate. HMRC is to embark on a public relations campaign in the coming months, but its strategy has been questioned.

In its submission, The Chartered Institute of Taxation said: "It is our impression that awareness of the SRIT, including the issue of Scottish taxpayer status, is low amongst all affected groups: this is particularly an issue for taxpayers.

"We think more could have been done to publicise the SRIT among the tax agent and tax adviser community and at an earlier stage. In addition, it is arguable that employers and taxpayers would benefit from a gradual increase in publicity, whereas it is clear that for the majority of the general public, there is in effect going to be one ‘big bang’ of publicity around the time of the announcement by the Scottish Government of its proposed rate for the SRIT."

It is expected that John Swinney will announce the Scottish rate in January, when the Scottish Government's budget is announced. It has been delayed by several months, due to ministers waiting for the UK Government to announce its spending review in November.