On Tuesday, Scotland’s SNP Deputy First Minister Shona Robison announced the creation of a new income tax band for those on salaries of £75,000 a year and above as part of its budget, saying it “is the right choice.”
However, Scottish Secretary Alister Jack warned the hike will make Scotland the “highest-taxed part of the United Kingdom.”
The proposed advance tax rate of 45 percent will be applied on earnings from this level to £125,140. Starter and basic rate bands have also increased.
The move, which will come into force from April, is part of a series of changes to income tax in Scotland.
Ministers hope to help raise £1.5 billion in additional cash for public services. The Scottish government’s proposed spending includes funding for NHS boards by £550 million as well as giving councils £1.5 million to “wipe out school meal debt” incurred by pupils.
Ms. Robison said that she will also fully fund its “proposed council tax freeze,” providing local government with the equivalent of a 5 percent rise.
“When public services need investment and protection from Tory cuts, this government does believe that those with the broadest shoulders should pay a higher rate of tax,” said Shona Robison
£126 per Person
Scottish Secretary Alister Jack said the budget was “penalising.”“Today’s Scottish budget widens even further the tax differential between Scotland and the rest of the country.
“Making Scotland the highest-taxed part of the United Kingdom is bad for our economy. It deters business investment and punishes hard-working people.
It said that the Scottish government receives £126 per person of Barnett-based funding, the formula which is used to decide how much money devolved nations receive, for every £100 per person of equivalent UK government spending in England and Wales.
“The Scottish government has a record block grant yet wastes hundreds of millions of pounds,” said Mr. Jack.
Lost
A Scottish Fiscal Commission SFC report published on Tuesday said that the changes to income tax policy since 2017 mean someone in Scotland earning £100,000 will now pay £3,346 more in income tax than they would in the rest of the UK.“Even the SFC thinks that £45 million of the potential £53 million raised from an additional 1p on the top rate of income tax will be lost in the first year due to behavioural changes (and the percentage lost will increase over time),” he said.
Scottish Conservative finance spokeswoman Liz Smith said: “Under the SNP, Scotland was already the highest taxed part of the UK—and the income tax rises announced by Shona Robison have only widened that gap and increased the burden on hard-working Scots.
“They mean that 100,000 more Scots are now paying the higher rate of tax,” she added.
The Epoch Times contacted the Scottish government for a response.