Holyrood votes to approve income tax plans

HOLYROOD voted for Finance Secretary Derek Mackay’s income tax plans which leave rates as they are.

While having the power to change tax rates, Mr Mackay in his budget set income tax the same as the rest of the UK.

It remains at 20% for basic rate, 40% for the higher rate and 45% for the additional rate for the highest earnings.

He initially wanted to increase the threshold for higher rate at £43,000 in line with inflation but not to the same level as the UK Chancellor who will increase it to £45,000.

But after a deal with the Greens to back his budget, he agreed to freeze it at £43,000, meaning people on high- er rate tax in Scotland will pay the same tax as before while others in the UK get a cut.

SNP MSPs voted for while Labour Lib Dems and Tories voted against. The greens abstained to allow the budget to get through. Labour said the decision was a missed opportunity.

Alex Rowley, deputy leader, said: “We had a chance to give young people a better future by investing in child care, in education, in skills and in jobs; and we had the chance to provide better care when it is needed for those who deserve dignity and respect in old age.

“The SNP chose not to invest – the SNP chose to continue Tory austerity.”

It wanted to raise the basic rate by 1% and the Tories wanted the higher rate threshold to increase in line with the UK.

Mr Mackay said: ““Now is not the time to add to the burden of low and middle-income taxpayers as Labour would.”

He added: “Now is not the time to be giving away a substantial tax cut as the Tories would.”

FINANCE Secretary Derek Mackay has capped business rate increases for the hospitality sector in response to widespread concern about the impact of a controversial revaluation.

Mr Mackay, above, told MSPs a new 12.5% cap on bill rises for restaurants, pubs, hotels and cafes would also apply to office premises in Aberdeen and Aberdeenshire to reflect the impact of downturn in the North Sea economy.

A package of extra support for the renewables sector was also set out by Mr Mackay in the Holyrood chamber.

He has faced growing pressure to intervene to help businesses cope with the first revaluation of the rateable value of businesses since 2010 amid warnings many facing large increases could be forced to close or shed staff.

Mr Mackay said measures already put in place by the Scottish Government meant seven out of ten business premises would be better or no worse-off after the revaluation, with more than half paying no rates at all.

He added: “It has become clear there are some sectors and regions where the increase in rateable values is out of kilter with the wider picture of the revaluation.

“I can confirm to the chamber today that we will offer a new national relief that caps increases for hotels at 12.5%. Because we recognise that we must maintain fairness between hotels, pubs, cafes and restaurants, this will apply across those businesses too.”