Swinney hints at tax rises to come following Autumn Statement

A summary of the headline tax announcements in the UK Autumn Statement, together with CIOT’s reaction, can be read on the Institute’s website here.

Speaking after the Chancellor delivered his tax and spending plans to MPs in the House of Commons, the Deputy First Minister told journalists that the government would be sticking to its orthodoxy that those earning more would pay more to deliver a more progressive system. Swinney was reported by the ‘I’ newspaper as saying:

“The shape of our approach to taxation – where the lower people are on the income scale the less they pay, the higher people are on the income range the more they pay – will be the characteristics we will be working to reflect in the individual tax decisions we take”.

Swinney – who is standing in for Finance Secretary Kate Forbes during her period of maternity leave – stopped short of spelling out the government’s tax plans – reserving these for the Scottish Budget which is due to be announced on 15 December.

As the Chancellor was speaking, First Minister Nicola Sturgeon told MSPs in the Scottish Parliament that the tax rises being announced by Hunt were the consequence of ‘Tory mismanagement’. The SNP’s Treasury spokesperson at Westminster, Alison Thewliss, called on the Chancellor to widen the scope of windfall taxes further to include share buybacks among FTSE listed companies, increase immigration to widen the tax base and end non-dom status.

Scottish Secretary Alister Jack said the statement highlighted the ‘complex global challenges’ facing the UK but stressed it would ‘create the economic stability we need for our long-term prosperity’.

Among some of the early reaction to the statement, the Scottish Chambers of Commerce acknowledged the need for economic stability but warned of the increasing tax burdens facing the oil and gas sector as a result of his decision to increase the windfall tax on excess profits.

The Federation of Small Businesses described the statement as ‘tough’, warning that many more small traders would find themselves ‘dragged’ into VAT as a result of the decision to retain the VAT threshold at £85,000. David Alexander of the lettings agency DJ Alexander said the changes to Capital Gains Tax exemption rates would act as a further disincentive to housing investment, Alexander being a vocal critic of the Scottish Government’s approach to Land and Buildings Transaction Tax.

The Scottish Government will publish its draft budget for 2023/24 on 15 December. Before then, Swinney has hinted to the Scottish Parliament that a tax discussion paper will be published setting out the government's thinking on future devolved tax policy choices.

CIOT External Relations.