It's true that they are used interchangeably in terms of flavour, as the actual products are made using the same ingredients but are heated for different amounts of time so that the sugar has different consistencies. So yes, the flavours are the same, but an actual piece of toffee is a different consistency to an actual piece of caramel.
The only difference in ingredients is that butterscotch is always made with butter, where as toffee is made with some form of dairy, which can be butter, condensed milk, or milk powder. Caramel comes in different forms - sometimes it doesnt' contain any dairy, but it usually contains condensed milk or milk powder. Not many caramels contain butter.