Hard-working Scots face new SNP income tax hike threat

HARD-woRking Scots face a new tax hike threat which could add to the cost of living crisis.

The SnP/green government is considering income tax rises for higher earners ahead of its Budget later this year.

Any increases would further widen the tax gap between Scotland and the rest of the Uk, with everyone earning more than £27,850 already paying the highest rates in Britain.

it comes as Liz Truss, frontrunner to become Conservative Party leader and Britain’s next Prime Minister, is reportedly lining up emergency income tax cuts south of the Border to relieve pressure on family finances.

An income tax gap between Scotland and the rest of the Uk has opened up in recent years as ministers revamped rates and bands and refused to pass on cuts for middle and top earners seen in other parts of the Uk.

Despite this, official figures show that income tax revenue in Scotland increased at a slower rate than in England last year.

Scottish Conservative finance spokesman Liz Smith said: ‘working Scots are paying more and getting less. The nationalists’ punishing and misguided income tax system is already driving away talent and investment, and putting the brakes on our economic growth.’

She added: ‘The SnP-green government must urgently rule out further tax rate increases before they inflict even more damage on our recovering economy.’

Under the current approach to tax, anyone on a £45,000 salary pays £439 more in Scotland than England, rising to £1,489 for people on £50,000, £2,043 at £100,000 and £3,169 at £200,000.

The SnP’s manifesto for last year’s Holyrood elections pledged to freeze income tax rates and increase thresholds by ‘a maximum of inflation’.

But it also described the policy as only an ‘aim’ – and said there needs to be ‘flexibility to respond to a change in circumstances’.

The Sunday Times yesterday quoted a senior SnP source saying: ‘Manifesto commitments are made in good faith but unforeseen events like the current economic crisis are off the scale, meaning commitments will have to be revisited.’

Another source claimed it is ‘inevitable’ that taxes will have to rise for those who ‘can afford to pay’.

greens MSP Ross greer said: ‘The greens reformed income tax in 2018 to raise more for public services by having the highest paid contribute a bit more.’

He added: ‘we are open to further changes there and to other devolved areas, as well as the creation of new local tax powers.’

Scottish government figures published last week showed that £14.9billion of revenue was raised from income tax in Scotland in 2021/22, which was 14.3 per cent higher than the £13billion raised the previous year. Across the Uk as a whole, income tax revenue increased by 16.5 per cent over the same period, from £195.6billion in 2020/21 to £227.9billion last year.

The Scottish Tories say that if Scotland had enjoyed the same rate of growth as the Uk as a whole, this would have provided an extra £286million of revenue for public services – and claimed the SnP’s approach is ‘driving away talent, jobs and investment’.

A Scottish government spokesman said: ‘Decisions about future tax policy will be announced, as per the normal fiscal process, as part of the Scottish Budget 2023-24.

‘our tax policy continues to be based on a fair and progressive approach to taxation.’