38,000 snared in Mackay’s tax trap

FISCAL drag is a most underhand method of increasing the tax take.

Workers guilty of nothing more than getting a promotion or a modest pay rise find themselves paying more because the thresholds at which different tax bands kick in have been frozen.

HMRC reports that 38,000 Scots were snared in Finance Secretary Derek Mackay’s trap when he froze the threshold for the 40p rate at £43,000 at 2016.

By contrast, Chancellor Philip Hammond increased the threshold south of the Border to £46,350 – meaning 38,000 Scots got to take home hundreds less for their hard work than their counterparts.

No figures are yet available for the picture since Mr Mackay raised the rate itself from 40p to 41p, applied since this April (when the threshold was also raised a smidgen) but the direction of travel is clear: Working in Scotland is an ever-more expensive business.

As Stephen Daisley argues elsewhere on this page, the higher taxes are supposed to be part of a social compact.

Nicola Sturgeon seems to believe workers will be happy to take home less because life in Scotland is so much better. But that stands little scrutiny. The NHS in Scotland is, from GPs to A&E, radiology to mental health, in crisis.

Standards in schools which were once seen as world-leaders are slipping, limiting the life choices of pupils.

Rail transport is expensive and unreliable. Potholed roads are sclerotic with traffic.

The economy is flat-lining with feeble productivity and growth trailing levels seen south of the Border.

Only one side of the compact appears to have been delivered – the higher tax side – while the promised benefits remain illusory.

Already Mr Mackay is talking of further ‘divergence’ from the taxation regime in the rest of the UK.

That means more money in government coffers and less in the wallets of the hard-working.

Scotland needs to attract the brightest and best workers.

About to again disappear down the independence rabbit hole, the SNP seems unaware that its fiscal policy is making the country unattractive for newcomers and uncomfortable for those already trying to make a living here.