£104 EXTRA FOR ALL EMPLOYEES
... and Scotland will be handed £2billion more in funding package
SCOTS workers will get to keep more of their earnings, thanks to a tax cut unveiled yesterday.
Rishi Sunak’s decision to raise the National Insurance threshold will provide a £104 tax boost for employees across the UK, while the self-employed will benefit by £78.
The Scottish Government is also set to receive an extra £2billion next year, as a result of the spending splurge south of the Border, in areas devolved to Holyrood.
Unveiling the measures yesterday, Mr Sunak said: ‘I am increasing, in just four weeks’ time, the National Insurance threshold from £8,632 to £9,500. That is a tax cut for 31million people, saving a typical employee over £100.’ He said the decision, together with changes to the national living wage and income tax, showed that the Conservatives are the ‘real workers’ party’.
National Insurance applies across the UK, while income tax is devolved and controlled by the Scottish Government.
Yesterday, Mr Sunak opted to freeze income tax thresholds south of the Border after a series of increases which have not been passed on to Scots by SNP ministers.
Around 1.1million taxpayers pay more income tax in Scotland than they would if they lived in other parts of the UK.
Those earning £50,000 will pay £1,542 more in Scotland in the year starting at the beginning of next month, rising to £2,042 at £100,000 and £2,667 at £150,000.
Scottish Conservative economy spokesman Maurice Golden said: ‘There’s clearly only one party and one government which cares about the tax affairs of hardworking Scots. While the SNP continues to raid people’s pockets, the Conservative UK Government is allowing Scots to keep more of their hard-earned cash.’
The Chartered Institute of Taxation pointed out those earning between £43,430 and £50,000 in Scotland will pay the higher rate of income tax – set at 41 per cent – but will also continue to pay the higher National Insurance rate, giving them a ‘marginal tax rate’ of 53 per cent. Alexander Garden, chairman of the institute’s Scottish technical committee, said: ‘The Chancellor’s income tax decisions don’t widen the income tax gap between Scotland and the rest of the UK any further, but they entrench the differences between the two regimes.
‘It means that from April 6, Scottish taxpayers earning more than £27,243 will pay more in income tax compared to the rest of the UK, while Scottish income tax payers earning less than this will pay a lower amount of tax as a result of the Scottish Government’s income tax policy. Taxpayers across the UK will benefit from the Chancellor’s planned reductions in National Insurance. But because income tax is only partially devolved – and National Insurance remains set at a UK level – the anomaly that sees some higher rate taxpayers pay a 53 per cent marginal rate of tax will continue.’
As a direct result of measures in yesterday’s Budget, the Scottish Government will receive an extra £640million of funding. This is in addition to an extra £1.3billion as a result of previously announced plans, giving an overall £2billion funding boost.
Mr Sunak stressed that one of the Budget’s priorities is ‘building our Union’.
Scottish Tory finance spokesman Donald Cameron said: ‘This was an excellent Budget for both Scotland and the whole UK, and at a time when we need it most.’
He added: ‘It’s essential the Scottish Government now steps up to take similar action to ensure people in Scotland are afforded the same reassurances.’
SNP Finance Secretary Kate Forbes said: ‘The Barnett consequentials announced today are in line with the assumptions that underpinned the Scottish Budget and Budget Bill passed by the Scottish parliament last week. While this funding is welcome, our resource budget is still lower in real terms than it was in 2010-11.’
‘SNP continues to raid people’s pockets’