Holy­rood’s tax changes mean 507,000 Scots now face big­ger bill says re­port

Evening Express (City Final) - - Scotland Today -

MORE than half a mil­lion Scots will pay more in tax this year as a re­sult of changes brought in at Holy­rood, a new re­port has es­ti­mated.

For 2017-18, which was the first year min­is­ters at Holy­rood had power over in­come tax rates and bands, they only made mi­nor changes.

Rather than fol­low West­min­ster’s ex­am­ple and in­crease the thresh­old at which peo­ple start pay­ing the 40p rate of in­come tax, the Scot­tish Gov­ern­ment opted to keep this at £43,000.

An es­ti­mated 507,000 Scot­tish tax­pay­ers were af­fected by this, ac­cord­ing to the National Au­dit Of­fice, with the change re­sult­ing in them pay­ing an es­ti­mated £108 mil­lion more in tax.

The re­port said: “The ex­tra tax li­a­bil­i­ties are an av­er­age of £213 com­pared to other UK tax­pay­ers. This is be­cause tax­pay­ers in Scot­land start pay­ing the higher rate of tax (40%) when they earn £43,000, as op­posed to £45,000 in the rest of the UK.”

It added that HM Rev­enue and Cus­toms (HMRC) “does not ex­pect that the dif­fer­ence be­tween Scot­land and the rest of the UK will lead to avoid­ance or eva­sion in 2017-18”.

How­ever, if the tax rates be­tween Scot­land and the rest of the UK “di­verge more sub­stan­tially” in the fu­ture, HMRC said it would in­crease its com­pli­ance work north of the bor­der.

The re­port was pub­lished ahead of next month’s Scot­tish bud­get, in which it is ex­pected SNP min­is­ters could make more changes to the in­come tax regime af­ter First Min­is­ter Ni­cola Stur­geon called for a de­bate on more “pro­gres­sive” use of tax.

Scot­land has an es­ti­mated 2.6 mil­lion tax­pay­ers, with HMRC stat­ing it has now rec­ti­fied is­sues that led to it not iden­ti­fy­ing 420,000 peo­ple as po­ten­tial Scot­tish tax­pay­ers in 2015.

Amyas Morse, head of the

HMRC said it could in­crease com­pli­ance work

National Au­dit Of­fice, said: “HMRC has made good progress in as­sur­ing it­self of the ac­cu­racy of the Scot­tish tax­payer pop­u­la­tion, but could do more with its own data to im­prove the ac­cu­racy of in­come-tax re­ceipt es­ti­mates.

“Peo­ple are at risk of pay­ing the in­cor­rect amount of tax if they do not pro­vide HMRC with ac­cu­rate ad­dress data and HMRC do not know whether its in­ter­ven­tions to raise aware­ness of this has been suc­cess­ful.”

Go­ing UP: Ni­cola Stur­geon has said she wants a de­bate about in­come tax.

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