Scottish Budget – confirmation that higher rate taxpayers will pay more in Scotland

Finance Secretary Derek Mackay outlined the Scottish Government’s draft budget for 2017/18 to Parliament on Thursday.  A copy of the full budget document can be found here.

It has also been confirmed this week that MSPs will be asked to vote on the Scottish Government’s tax proposals one week before they vote on the 2017/18 budget.  In order to pass its measures, the Government will need to seek support from other parties represented in Holyrood due to the fact that it has no overall parliamentary majority.

Key tax announcements from the Scottish budget at a glance:

Scottish Rate of Income Tax (SRIT)

  • Basic rate of income tax will be frozen at 20%, higher rate, 40% and the additional rate at 45%
  • Threshold for higher rate to rise by inflation only to £43,430

Business taxes

  • 100% rate relief threshold increased to £15,000, exempting 100,000 properties from business rates
  • Overall business rates poundage – the core tax rate that applies to the rateable value of business properties – will be cut by 3.7% to 46.6p.
  • Threshold for the large business supplement increased to £51,000, restricting liability to the very largest businesses and excluding 8,000 business properties

Property taxes

  • Residential and non-residential rates and bands for Land and Buildings Transaction Tax (LBTT) will remain unchanged

Environmental taxes

  • The Standard Rate of Scottish Landfill Tax (SLfT) will be increased to £86.10 per tonne and the Lower Rate of SLfT to £2.70 per tonne in line with RPI inflation and landfill charges in the rest of the UK.

The reaction

All Scotland’s opposition parties said that they would oppose the measures as they currently stand with some appearing to offer olive branches.  Scottish Conservative finance spokesman Murdo Fraser accused Mr Mackay of “hiking taxes on families and businesses, risking a chocking of economic recovery.”  For Scottish Labour, Kezia Dugdale said that the budget had “ripped the heart out of public services” while passing responsibility for tax rises over to councils via the lifting of the council tax freeze.  Scottish Green leader Patrick Harvie said that “much had to be worked on” in order for the budget to pass in February, while Scottish Liberal Democrat leader Willie Rennie said there were “acres of common ground between the parties” but that the Finance Secretary had “miles to travel before we can reach an agreement.”

CIOT response and media coverage

Following publication of the draft Budget, the CIOT in Scotland issued a press release commenting on the tax measures contained within the budget.  This release can be found by clicking here. CIOT’s comments on the Scottish budget were covered by a number of media outlets, including the Daily Mail, Daily Telegraph, Daily Express, National and the Herald (click each link to see links to online versions of each article).

 

0 comments | Post a comment