Budget gap of £550m will not hurt public spending, Mackay claims

A gap of more than £500 million between income tax revenue and forecast estimates will not affect the Scottish Budget, the finance secretary has claimed.

The Scottish Fiscal Commission estimated income tax revenue of around £11.3 billion for 2016-17, but the out-turn figure was £10.7bn – a £550m difference.

Giving evidence to Holyrood’s finance and constitution committee, Derek Mackay said more accurate figures were coming from HMRC on out-turn than the survey-based estimates used in the initial forecasts. He said these would be reconciled as a baseline figure.

“In short there’s no impact on the Scottish Budget as a consequence of that particular issue,” he said. “Fundamentally we have a clearer understanding of how many additional rate and higher rate taxpayers that we have.”

Mr Mackay said all decision makers had to be mindful of the tax base composition on future policies.

He also confirmed he would set out his tax plans for next year six weeks after the UK Budget. MSPS will not discover what the Scottish Budget will be until 12 December.