It’s Black Thursday... as tax rises

FINANCE Secretary Derek Mackay last night claimed the Scottish Government’s new revenue-raising powers were a force for ‘fairness’ – despite using them to turn Scotland into the most taxed part of Britain.

The Scottish Income Tax, which comes into force on Thursday, will for the first time see Scots pay tax at a rate set by Holyrood.

Mr Mackay welcomed the powers, saying they would be used to make Scotland ‘an attractive place to live, work and do business’.

But for the first time a Scottish Government will subject higher-rate Scottish taxpayers to a more punitive tax regime than their English counterparts.

Chancellor Philip Hammond’s Autumn Statement announced plans to increase the threshold for the 40p higher rate of income tax from £43,000 to £45,000 a year.

But the Scottish threshold will remain at £43,000, so anyone north of the Border earning more than £45,000 will pay £400 more tax in Scotland than their English counterparts.

Scottish Tory finance spokesman Murdo Fraser said: ‘The SNP have so far totally failed to use any of the new powers at their disposal to grow the economy. Their income tax rates are a prime example of this, where once again we will see Scots paying more tax than anywhere else in the UK.

‘There is no good reason why some Scots should pay hundreds of pounds more than someone on a similar wage south of the Border.’

But Mr Mackay insisted most taxpayers will see no change in the amount they pay and claimed the Scottish Government was ‘putting newly devolved powers to good use in making Scotland fairer and supporting public services’.

The introduction of the Scottish Income Tax came as workers charged with implementing the new powers at regional centres in Glasgow and Edinburgh warned they may struggle to deal with the transfer due to understaffing and poor morale.

But last night an HMRC spokesman said: ‘Scottish taxpayers will pay the correct tax from the first day of the new tax year.’