Avoiding high rates

Scottish government staff paying English income tax

Income tax own pic
Nearly 300 Scottish government staff live in England (pic: Terry Murden)

Almost 300 Scottish Government staff are paying their income tax south of the border and therefore benefiting from rates that are lower than those imposed on Scotland.

The Scottish Conservatives found that 280 Scottish Government employees are not paying SNP rates because they are resident in England.

This means they are exempt from Scottish taxes despite the SNP raising income tax to its highest level since devolution began.

Liz Smith, Scottish Conservative Shadow Secretary for Finance and Local Government, said: “The growing gulf in tax rates is a huge disincentive for people to live and work in Scotland, and one of the factors most likely to inhibit the economic growth we so desperately need.

“It is embarrassing and telling that so many Scottish Government staff should be paying the rate that applies south of the border to avoid the punitive tax imposed by the SNP.”

She added: “While it is entirely understandable that those with valid grounds for doing so – for example, if their family home is in England – should choose to avoid the extra tax imposed by the SNP it is also a humiliating rebuke to their employer.

“And, after the latest tax hikes in [Finance Secretary] Shona Robison’s disastrous budget, it would be no surprise if more people in the south of Scotland moved house to Berwick or Carlisle – to avoid being clobbered further.

“These figures are a portent of the growing behavioural change we can expect in the wider workforce – which experts have warned about – because the SNP Government continue to make it more expensive to live here.

“Those huge extra costs for middle earners actually bring in a tiny proportion of the SNP’s funding shortfall, but they risk driving away the doctors, dentists, business people, engineers and others that are crucial to Scotland’s economic health.”

Those earning more than £28,000 are worse off in Scotland compared with workers elsewhere in the UK, a position confirmed by Ms Robison in last month’s Scottish Budget

This is likely to lead to ‘behavioural change’, according to independent experts such as the Scottish Fiscal Commission and the Fraser of Allander Institute.

There has been speculation that workers will not be attracted to Scotland because of higher taxes. The SNP Government says there has been a net increase in migration of working age people from the rest of the UK to Scotland that has averaged almost 7,000 per year.

A spokesperson for Ms Robison said: “We will take precisely zero lessons from the Tories on tax policy – their credibility rating was downgraded to junk status the moment they demanded we copy Liz Truss’s disastrous tax policies, which wiped billions from the economy, endangered pension funds and pushed up mortgage interest rates.

“Official statistics show that thousands more people have moved from Tory-run England to SNP-run Scotland than vice versa in the last few years – and no wonder.

“Thanks to the SNP’s progressive tax decisions, the majority of people in Scotland pay less income tax than they would elsewhere in these islands, and average Scottish council tax bills are also hundreds of pounds lower than south of the border.

“Meanwhile, everybody in Scotland benefits from universal services like free prescriptions when they are ill, and their kids can attend some of the finest universities right on their doorstep without paying a penny.”

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