Emergency meetings

Truss tax plans ‘to force early Scottish budget’

Nicola Sturgeon
Nicola Sturgeon: meeting advisers

An emergency Scottish budget is likely to be called to provide support to businesses and households in response to expected tax changes by the incoming Prime Minister.

Liz Truss, who is almost certain to be named Tory party leader and new PM on Monday, has pledged a number of cutbacks to ease the cost of living.

These include possible changes to income tax and business rates, both of which will impact directly on the Scottish Budget and the finances of the other devolved governments.

Scotland’s First Minister has held discussions with advisers and her ministers to consider changes in the fiscal regime. It could mean bringing forward the Scottish budget.

The Scottish government’s forecasting body, the Scottish Fiscal Commission, will revise its own figures to take account of changes introduced by Ms Truss who will be under pressure to announce changes within days of taking office.

Ms Sturgeon will set out her programme for government on Tuesday as the Queen officially appoints the new Prime Minister at Balmoral.

In light of the energy emergency the SNP may have to rip up its plan to freeze income tax rates and increase thresholds by “a maximum of inflation”.

Anyone who earns more than £27,850 in Scotland already pays the highest income tax rates in the UK and the SFC calculates that one in six working people in Scotland will soon be among the most taxed people in the UK as they fall into the higher 41% rate of income tax.

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