Scotland given separate income tax rates from the UK for the first time

Written by Tom Freeman on 22 February 2017 in News

MSPs pass new income tax rates for Scotland in 'historic vote' following deal struck between the SNP and Greens

Scottish Parliament - Anita Gould

MSPs have passed measures setting all income tax rates and bands in Scotland for the first time in the Scottish Parliament's history.

The vote means from April the current thresholds where wages are taxed in different bands will be frozen in Scotland, while the threshold for the 40p rate will start at £43,000, compared to £45,000 elsewhere in the UK.

The move represents an agreement between the SNP and the Scottish Greens as the minority Scottish Government sought backing for its budget.


New business rate reliefs announced by Derek Mackay

Scottish Greens reach budget deal with SNP

Those living in Scotland who earn over £43,000 will not face a tax bil of up to £400 more than their counterparts south of the border.

Finance Secretary Derek Mackay said: "The Government is always mindful of the impact that taxes may have on individuals. Tax powers are not a political toy; they have an impact on individuals, which we must consider carefully. We are a Government that recognises the importance of growing the economy while raising sufficient revenue to fund further investment in our vital public services."

Conservative finance spokesperson Murdo Fraser said around 374,000 people will face higher tax bills.

"There are many thousands of households that include two adults and children, and in which just one adult in the household is working—the other has childcare responsibilities—and earns just over £43,000, which therefore represents the entire household income. Those are not wealthy individuals and they are not individuals who have spare cash at the end of the month, yet they are the individuals whom the SNP is targeting with its proposals," he said.

However Scottish Labour accused the SNP and Greens of pursuing "Tory austerity" instead of a "fair tax system".

Speaking after the vote deputy leader Alex Rowley said: “This was a vote that will enter the history books, and nobody will ever forget how the SNP and Greens voted to reject a fairer tax system for Scotland.

“Nobody will ever forget – or forgive – SNP ministers for deciding to continue with Tory austerity when they have the power to cancel the £170 million cut to local services such as education and care for the elderly," he said.

The Scottish Greens abstained from the final vote, meaning the Scottish Government's proposals were passed.

Greens co-convener Patrick Harvie said: "Some members have spoken about forgoing a tax cut that the UK Government is pursuing. We need to forgo such language and the thinking that compares tax policy in Scotland with tax policy south of the border. We should compare ourselves with the country that we want to be, not with our nearest neighbour.

"While the Scottish Government’s position is somewhere in between the glowing praise and the outright condemnation [from the other parties], it is certainly not the ambitious and creative approach to tax policy that I would like to vote for, so I will not be voting for it. However, I will not block the motion, because of the consequences of blocking it."



Related Articles

UK Government Brexit white paper ‘falls short’, Scottish Government says
12 July 2018

The paper sets out the UK Government’s proposals for a post-Brexit relationship with the EU, but the Scottish Government suggested it offered “little reassurance”

Q&A: Finance Secretary Derek Mackay on future growth in the digital economy
5 July 2018

Digital has been placed at the centre of future economic growth and the Scottish Government has committed to supporting it

Banks have failed to engage with communities over branch closures, MSPs warn
3 July 2018

The Economy, Jobs and Fair Work Committee found that branch closures were hitting the most vulnerable, with MSPs warning that alternative options to face-to-face banking have not been adequate

Scottish economic growth faster than UK at start of 2018
28 June 2018

Scotland and UK continue to experience slow growth but Scotland outstrips UK for first time in years

Related Sponsored Articles

Share this page