Main Menu

Swinney to unveil income plans

Budget will focus on property and income tax

 

John Swinney at DigitalJohn Swinney is expected to reveal in tomorrow’s Budget statement whether he will match the 3% second homes and buy-to-let tax which the Chancellor George Osborne introduced south of the border in his Autumn Statement.

Business leaders are hoping the Finance Secretary will say something on business rates, possibly announce a review in line with the process under way in England.

Mr Swinney’s new powers include setting the Scottish rate of income tax (SRIT) which was part of the Scotland Act 2012 and takes effect in April. This will see the current income tax rates reduced by 10p in the pound for Scotland, leaving the Scottish Government to set a rate to generate its own income.

The government has spoken of increasing the top rate. Any change, however, has to be applied across the bands, which means the Government can’t increase the top rate without also increasing the lower rates.

Increasing the SRIT, for example from 10p to 12p, will mean raising the basic rate from 20p to 22p, the higher rate from 40p to 42p and the additional (top) rate from 45p to 47p.

It would result in a larger percentage increase in income tax liabilities for lower earners compared to higher earners. Lowering the SRIT, for example from 10p to 8p, will result in a larger percentage decrease in income tax liabilities for lower earners compared to higher earners.

There are about 14,000 additional rate taxpayers in Scotland who make up half a percent of the taxpayer population in Scotland. Nearly one in seven additional rate taxpayers in Scotland are employed in health and social work, more than in Scotland’s finance and insurance sector.

Most analysts believe SRIT will be set at 10p which means taxes will remain the same as those in England.

Who pays additional (top) rate tax?

top rate taxpayers infograph

 

Photo: John Swinney, Moya Greene of Royal Mail, and Cally Russell of Mallzee at the opening of the new Mallzee head office in Edinburgh (by Terry Murden)

 

Share The News Tweet about this on TwitterShare on FacebookShare on Google+Email this to someoneShare on LinkedIn





Leave a Reply

Your email address will not be published. Required fields are marked as *

*