BUDGET AT A GLANCE

INCOME TAX: The higher rate of income tax, currently 40p in the pound, will rise to 41p. The decision will affect 350,900 taxpayers who earn above £44,273. The additional, or top, rate of tax will rise from 45p to 46p, adding to the bills of 18,900 people earning more than £150,000. A new 21p ‘intermediate’ income tax rate will be introduced on earnings of between £24,000 and £44,273. It will mean 892,600 current basic rate taxpayers will pay 21p in the pound tax instead of 20p. A ‘starter rate’ of 19p, 1p lower than the current basic rate, will apply for all earnings between £11,850 and £13,850. The package means 30 per cent of Scots taxpayers will pay more, while 45 per cent will pay more than those earning the same in the rest of the UK. The changes for lower-income earners mean 70 per cent will pay marginally less tax, and 55 per cent will pay less than workers earning the same in other parts of the UK.

PUBLIC SECTOR PAY: Public sector workers will receive a 3 per cent pay rise if they earn less than £30,000, while those earning above that will receive a 2 per cent rise, capped at £1,600 for those with salaries above £80,000.

LAND AND BUILDINGS TRANSACTION TAX: Calls to reform the Land and Buildings Transaction Tax were rejected, despite claims it is damaging the middle to top end of the market. But first-time buyers will not have to pay tax on purchases of up to £175,000, a policy which will cost the Government only £5million next year.

ECONOMY: The Scottish Fiscal Commission warned that the economy is set to lag behind the UK for the next five years, with the slowest sustained growth for nearly six decades. According to the forecast, Scotland’s GDP will increase by less than 1 per cent until 2022, when it will finally reach just 1.1 per cent.

COUNCIL TAX: Many Scots could see their council tax bills soar as Mr Mackay told local authorities they should increase tax bills by 3 per cent if they want to get additional cash, claiming this would raise around £77million. They may need the money – as Mr Mackay opted to give them a real-terms budget cut of £135million.

PRIVATE SCHOOLS: Private schools will no longer be allowed charitable relief on business rates, which could increase fees for parents and force them to turn away deserving children who previously would have received a bursary place.

BUSINESS RATES: The Scottish Government announced it would follow the Chancellor’s lead by confirming any rates rises will be calculated by Consumer Price Index (CPI) rather than the higher Retail Price Index (RPI).

NHS: An extra £400million was announced in health spending. But, despite the giveaway, doctors claimed this was ‘simply not enough’ to hold off now inevitable cuts to services.

BROADBAND: Superfast broadband will be rolled out to every home and business in Scotland by 2021, as Mr Mackay pledged a £600million investment in the Reaching 100 programme over the next four years.