Rathdown is correct that historically the cravat was a less formal accessory. However, I think it should also be considered that hardly anyone sports a cravat these days! So, in terms of style, if I chose to go about my daily business wearing a cravat it would likely be seen as a bit out of place.
However, when people get dressed up in their finest for a Burns Dinner or a Tartan Ball or what have you -- especially when in Highland dress -- one often wears things that could be considered out of place or anachronistic these days. Highland dress especially retains many elements that one normally doesn't see any longer, just look at the cuffs of most kilt jackets.
So I think that one could easily make the cravat work for more formal occasions in Highland dress -- which is why when I chose mine I chose black silk in particular. I was looking for something to replace my black bow tie.
Of course another consideration is the venue. How strict is the dress code? At most of the Burns Suppers I have attended one will see a mix of bow ties, lace jabots, and neck ties, and even an odd open collar shirt here and there. People generally wear the best they have, and not everyone is in Highland dress.
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