Tax turns heat on families hit by rising prices
FAMILIES have seen their main household bills rise by more than £300 in the past year, fuelling claims that many cannot afford the SNP’s planned tax rises.
The rising price of gas and electricity has been blamed for a surge in the degree of household income needed to meet household payments.
It comes at a time when families face rises in food prices, mortgages and inflation.
The Scottish Government has been urged to drop its plan to hammer most people earning more than £33,000 with increased tax bills from April.
A report by Comparethemarket shows that the average cost of energy and insurance bills rose by £305 in the past year from £2,013 to £2,318. The 15 per cent increase in Scotland is 2 per cent higher than the £286 rise elsewhere in the uK.
Scottish Tory finance spokesman Murdo Fraser said: ‘It is no surprise to us that households are dealing with increased bills but the scale of the annual increase is a wake-up call for the SNP.
‘This is even more evidence that now is not the time to raise taxes on hard-working taxpayers. Scotland is already the highest taxed part of the uK. The SNP must drop the plan to impose its Nat Tax on struggling families and concentrate on revitalising the economy.’
Finance Secretary Derek Mackay’s Budget proposed a new 21p ‘intermediate’ tax band at £24,000 from April, as well as a 41p rate instead of 40p for higher rate taxpayers, while the top rate of tax will increase from 45p to 46p.
In addition, a new lower 19p ‘starter rate’ will apply to the first £2,000 of taxable earnings. The proposals will shrink the wages of nearly one in three Scottish workers, with most who earn more than £33,000 paying more tax.
It will also leave the 1.1million workers who earn more than £26,000 having to pay more than those south of the Border. The Comparethemarket research, which analyses data provided by companies to users of its price comparison site, shows that the average energy bill for people switching suppli- ers was £1,628 last year, compared to £1,360 in 2016.
Car insurance rose from £514 in 2016 to £575, while home insurance bills fell from £139 in 2016 to £115 in 2017.
The consumer site’s director Simon McCulloch said: ‘It’s been a torrid three years for household finances. The combination of soaring bills and squeezed wages is causing a lot of pain for millions.
‘The ongoing trend of “billflation” is most apparent within the car and energy markets.
‘In the latter case, consumers can expect to pay around £200 more than in 2016. Despite recent announcements from “Big Six” energy firms who plan to scrap standard variable tariffs, millions are still languishing on expensive default tariffs.’
The Scottish Government said: ‘our new, fairer, income tax policy will protect the 70 per cent who earn less than £33,000 and ensure they pay less tax next year for any given income, while asking those earning more than £33,000 to pay a proportionate amount more to support public services.
‘These measures combined with investment in the NHS, economy, infrastructure, education and essential public services ensure that in the year ahead Scotland will be the fairest taxed part of the uK.’
‘Concentrate on the economy’