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Johnson’s tax cut plan deepens row over earning gap

Boris Johnson

Tory frontrunner Boris Johnson wants to slash income tax for high earners


Boris Johnson’s proposed tax cut for high earners re-opened the arguments over the widening gap between workers north and south of the border.

Conservative leadership front-runner Boris Johnson pledged that if he becomes prime minister he will raise the threshold for the 40p tax band from £50,000 to £80,000 for workers in England, Wales and Northern Ireland.

The £9.6 billion cut would be paid for in part by increased employee National Insurance contributions. However, as income tax is devolved but National Insurance is reserved, the SNP said this would mean Scottish taxpayers funding a handout for well-off taxpayers in the rest of the UK.

Scottish workers already pay tax at a lower threshold than elsewhere in the UK. Mr Johnson’s supporters said that it was for the Scottish Government to follow his example and cut taxes to stimulate economic activity.

It didn’t go unnoticed that MPs’ salaries currently stand at £79,568, meaning they would benefit significantly from this tax cut, with Mr Johnson being accused of using the policy as a deliberate attempt to win support for his campaign from Tory MPs.

Alexander Garden, chairman of the Chartered Institute Of Taxations’s Scottish Technical Committee, said: “If enacted, the proposals put forward by Boris Johnson are likely to throw into sharp focus the growing tax divide between Scotland and the rest of the UK.

“Taxpayers in Scotland who pay income tax at the rates and bands decided by the Scottish Parliament for earned income would not see any of the benefits of the proposal to increase the higher rate threshold from £50,000 to £80,000, but they would be impacted by changes to National Insurance Contributions (NICs).

“That is because decisions over NICs remain reserved to Westminster, while decisions over income tax on earned income are devolved to Holyrood. 

“Under the Johnson tax plans, some Scottish taxpayers with earned income may end up paying significantly more than their counterparts elsewhere in the UK”.

SNP MSP Angela Constance said: “Boris Johnson’s priorities are all wrong – and this latest wheeze is an appalling insight into the future of the country if he gets his way. 

“This proposal has more to do with appealing to Tory MPs than to meeting the very real challenges facing the UK. Yet, bizarrely, Boris Johnson remains frontrunner to be the next Prime Minister. 

“Scottish taxpayers now face the prospect of paying for a tax cut for the likes of Boris Johnson and his cronies. 

That would be entirely indefensible – and is only likely to see a further rise in support for independence, which would give Scotland full powers over tax.”

Labour shadow chancellor John McDonnell said: “This hand-out to high earners, at a time when public services are crumbling, shows just how out of touch Boris Johnson is from the realities of life in this country.

“This money is more than what we spend every year on justice, or children’s social care – and Johnson wants to give that away to his wealthy friends.

“The Tories do not have the interests of the many at heart, and it’s now time for a general election, a Labour government, and a fairer society.”


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