MSPs back new tax bands for Scotland

Written by Tom Freeman on 20 February 2019 in News

Scottish tax rates set to diverge further from the rest of the UK after MSPs back no change in the higher rate threshold

Tax return - CC2.0

The Scottish parliament has backed Derek Mackay’s Scottish rate resolution, which will see income tax rates and limits diverge from the UK more than ever before in 2019-20.

The decision allows MSPs to debate his budget in its final stage on Thursday.

The tax rates, which the government says will raise more than £11.5bn, were backed by 61 SNP MSPs, Labour and the Conservatives opposed and six – the Scottish Greens - abstained.

The Scottish rates will remain largely unchanged from last year, but Phillip Hammond’s budget saw the threshold rise on the higher rate in the rest of the UK.

The Scottish Conservatives accused the SNP of punishing middle earners, while Labour called for a 50p top rate.

The Liberal Democrats said the Government should apply a modest tax rise across the board.

Public Finance Minister Kate Forbes said the tax system would make Scotland “continue to be the fairest and the lowest taxed part of the UK".

“Our decisions on tax have enabled us to mitigate the decade-long bite of austerity that has been inflicted by the UK Government on our resource budget, and to continue to invest in our public services, our people and our businesses,” she said.

Conservative finance spokesman Murdo Fraser said the differences with the rest of the UK would encourage higher earners to leave Scotland.

“We do not believe that it is fair to burden hard-working Scots with yet more taxes and to widen the income tax gap between Scotland and the rest of the UK,” he said.

Scottish Labour’s finance spokesman James Kelly said the rates “lack ambition”.

“We need a plan that uses the powers of devolution positively, to stop the cuts and tackle child poverty.”

The rates see an intermediate rate of 21 per cent, charged on income above £12,444 and up to a limit of £30,930, and a 41 per cent higher rate on income above £30,930 and up to a limit of £150,000. The top rate remains 46 per cent.

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