Where cash YOU help to raise goes

THE annual Government Expenditure and Revenue Scotland (GERS) report is the most reliable and detailed account of how much money is raised in Scotland and how it is spent. Scottish Political Editor MICHAEL BLACKLEY looks in detail at where the money comes from and how it is invested. TAX

INCOmE tax is the single biggest source of revenue for the Government in Scotland, followed by National Insurance contributions and VAT.

In its Budget this year, the SNP again forced 1.1million Scots to pay more income tax than they would if they lived south of the Border. Everyone earning more than £27,243 pays more in Scotland.

The figures show the amount raised by income tax was £13.02billion last year, 1.5 per cent higher than the previous year.

Since the Scottish Government got control of income tax in 2016-17, the amount raised by income tax has soared by 10 per cent in Scotland and across the UK. This indicates that the tax gap which has opened up has not resulted in revenue rising faster in Scotland than across the UK.

Documents published alongside the GERS report say the Office for Budget Responsibility has indicated that some past income tax revenue may have been lower than expected due to ‘taxpayers moving their main residence from Scotland to elsewhere in the UK in anticipation of future tax increases’.

National Insurance, reserved to Westminster, raised £11.46billion for the Treasury in 2019-20, up 1 per cent on the previous year.

VAT revenues fell from £11.13billion in 2018-19 to £11.01billion last year, which could indicate the first impact of the slowdown in consumer spending caused by the coronavirus crisis.

Council tax generated £2.49billion last year, which was 5.4 per cent higher than the previous year as many authorities hiked bills.

Income from land and buildings transaction tax, which is paid on house purchases, rocketed by 7.9 per cent.

OIL

THE case for an independent Scotland ahead of the 2014 referendum was largely based on an oil boom but revenues have dried up since then. Last year, the industry generated £650million, down from £1.2billion the year before. The SNP’s White Paper on independence had forecast up to £7.9billion a year of revenue.

WELFARE

SPENDING on social protection in 2019-20 was £24.27billion, up from £24.20billion the year before. Within that, the biggest individual area of spending was the state pension, which cost £8.3billion.

Spending on social security increased by 4.1 per cent, to £19.98billion.

HEALTH

TOTAL spending on health soared, which includes the early costs of preparing the NHS for the coronavirus pandemic.

It received £13.76billion, up 5.2 per cent on the previous year. Last year, £164.1billion was spent on health across the UK, up 7.3 per cent from £152.9billion the year before.

EDUCATION

SPENDING on education and training increased by 6.4 per cent in Scotland, from £8.65billion to £9.20billion. This was a bigger increase than 4.9 per cent across the UK.