Scottish Budget: Higher earners to pay more income taxon December 19, 2023 at 5:30 pm

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People earning more than £75,000 will pay more tax as part of efforts to plug a £1.5bn funding shortfall.

shona robisonImage source, PA Media

Higher earners in Scotland are to pay more income tax, the Scottish government has announced.

A new 45% band will be introduced for people earning between £75,000 and £125,140 – meaning they will pay more tax than they currently do.

The top rate of tax, paid by those earning more than £125,000, will also rise from 47% to 48%.

Finance Secretary Shona Robison confirmed the move as she unveiled the government’s budget for next year.

The changes mean Scotland will have six income tax bands while the rest of the UK has three, with higher earners in Scotland paying more than other parts of the country.

They are designed to help plug a £1.5bn funding shortfall in the Scottish budget alongside a series of spending cuts, with Ms Robison saying they would raise an additional £80m.

The finance secretary also confirmed the current thresholds for the higher and top bands – £43,663 and £125,140 respectively – would be frozen instead of rising with inflation.

She said this would generate an extra £307m through more people finding themselves in higher tax bands after being given pay rises.

Ms Robison told MSPs the Scottish government would provide local authorities with £140m in additional funding to help finance a council tax freeze.

Council umbrella body Cosla had called for £300m to cover the freeze, which was announced by First Minister Humza Yousaf in October.

Other major announcements included the government’s intention to increase the Scottish Child Payment to £26.70 from April of next year.

Ms Robison also said the government would provide £1.5m to local authorities to cancel school meal debt.

According to research by the Aberlour children’s charity published in October, more than 30,000 children had debts worth a total of £1.8m – up by 60% on the previous year.

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