Scotland 'To Gain Control Over Tax'

Plans to hand Holyrood control over income tax are expected to be included in proposals for devolution to be announced today.

The Smith Commission, which is tasked with reaching a deal on more powers for the Scottish Parliament, is due to report its recommendations this morning.

It is reportedly expected to recommend that full control over income tax rates and bands be devolved, although not personal allowances - the threshold at which tax is paid.

There is also speculation that Scotland could be handed new powers over welfare and the responsibility for running its own elections.

The Commission was set up by Prime Minister David Cameron within hours of September's independence referendum to deliver on the vow of further devolution for Holyrood made by the leaders of the three pro-union parties in the days before the poll.

Lord Smith of Kelvin, who is overseeing the process, will set out his proposals at the National Museum of Scotland in Edinburgh.

The contents are the result of more than a month of cross-party talks with representatives from each of the Scottish Parliament's five political parties.

The commission has also received over 400 submissions from organisations and more than 17,000 contributions from the general public.

Those party to the discussions have been tight-lipped about their progress but speculation has been fuelled by a number of apparent compromises that have emerged in recent days.

The SNP, Liberal Democrats, Conservatives and Greens all favour the full devolution of income tax but Labour has officially only backed Holyrood having control over some of the tax, with former prime minister Gordon Brown warning that full control would be a ''Tory trap''.

But Scottish Labour leadership candidate Jim Murphy this week called on his party to agree to full control of income tax to be handed to the Parliament.

His rivals for the role, MSPs Sarah Boyack and Neil Findlay, said Scotland must not be worse-off as a consequence of any changes.

Over the weekend the Liberal Democrats reviewed their position on the transfer of more welfare powers to Edinburgh.

The party's original submission to the commission had called for welfare to remain reserved to Westminster but leader Willie Rennie said the weight of submissions from charities and experts on the issue had provoked a change of heart.

The party now favours the transfer of a major package'' of welfare powers.

Lord Smith's recommendations, known as a Heads of Agreement, will form the basis of draft legislation due to be published by January 25.

The main parties at Westminster have pledged that the legislation will be taken forward regardless of the outcome of the general election in May.