Scots higher earners to miss out on £1bn tax cuts

HARD-woRking Scots will miss out on more than £1billion of tax cuts in the next four years, a report has revealed.

The higher rate threshold will rise to £50,000 in other parts of the Uk next year but the SnP will only announce its policy when it unveils its Budget next month.

it has already confirmed that it will not follow the move and will instead increase the threshold by only a maximum of inflation.

The Left-wing institute for Public Policy Research (iPPR) yesterday published research revealing that it would cost £1.06billion if Scotland matched the Uk threshold over the next four years.

it means that, if the SnP fails to match the move, it will come at a cost of more than £1billion to taxpayers in Scotland.

Scottish Tory finance spokesman Murdo Fraser said: ‘Taxpayers across Scotland will have a very simple question about all this: if workers in every other part of the Uk can benefit from a tax break, why can’t they?

‘what this research doesn’t address is how hiking taxes drives away wealth and

‘Drives away wealth and investment’

investment, all of which is bad for the economy in the short, medium and long-term.’

According to the iPPR research, matching the Chancellor’s tax cut in Scotland could cost up to £280million next year, then £260million in each of the following three years.

The Scottish government introduced a 41 per cent higher rate for people earning between £43,431 and £150,000 in April this year. The move means that everyone earning more than £26,000 a year pays more in Scotland than they would if they were based in other parts of the Uk.

But the iPPR opposes attempting to close the tax gap in next month’s budget.

Rachel Statham, iPPR Scotland economic analyst, said: ‘The cost of matching the Uk government’s tax cut for higher earners in Scotland would stack up to over one billion pounds.

‘This is far too high a cost for Scotland’s public services to pay to fund a tax cut for the better-off.’

A Scottish government spokesman said: ‘we have shown to date that we have taken responsible decisions to ensure Scottish tax is progressive and raises revenue needed to support our economy.’