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As part of Wednesday’s Spring Statement, Rishi Sunak announced the basic rate of income tax set at Westminster from 20 percent will be dropped to 19 percent from April 2024. As a devolved Government, Scotland sets its own income tax bands, and will also receive an additional £350 million in Barnett consequentials from the Chancellor.<\/p>\n
Under Scotland’s “progressive” tax system, the starter rate is at 19 percent for earnings of between £12,570 and £14,732.<\/p>\n
It then moves up to 20 percent, 21 percent and 41 percent at different thresholds, with the higher rate beginning at £43,663.<\/p>\n
The Chancellor’s proposals for 2024 see the 19 percent tax rate hit those earning between £12,570 and £50,270 in England.<\/p>\n
Unless Holyrood adapts its system before April 2024, around 2.5 million Scottish workers will pay more income tax than they would if they lived elsewhere in the UK.<\/p>\n
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Speaking to The Times, who reported the data, Daniel Hough, a financial planner at wealth management company Brewin Dolphin, noted Scotland will be “worse off”.<\/p>\n
He said: “The introduction of a 19 percent basic tax rate in the rest of the UK before the end of this parliament could mean more people in Scotland paying more tax than their equivalents elsewhere in the country. In fact, below-average earners in Scotland will be worse off.<\/p>\n
“This could put pressure on the Scottish government to reassess the current 19 percent, 20 percent and 21 percent bands north of the border and bring them more in line with the rest of the UK.”<\/p>\n
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During the Spring Statement in the House of Commons, SNP Shadow Chancellor Alison Thewliss claimed Mr Sunak’s announcement had “nothing for Scotland”.<\/p>\n
The Chancellor retorted: “Maybe she missed the part of the UK-wide fuel duty cut, which will save a typical driver £100 this year and a typical van driver £200.<\/p>\n
“Maybe she missed the part about the largest increase to personal tax thresholds ever, a £6 billion tax cut, which will help 2.4 million people in Scotland.<\/p>\n
“Or indeed the 75,000 businesses that will benefit from the employment allowance, again a £1,000 tax cut coming in shortly.<\/p>\n
“What I didn’t hear from her was whether the SNP are going to deliver the same income tax cut for Scottish taxpayers that the UK Government is delivering as paid for in these numbers in 2024.”<\/p>\n
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The Chancellor then continued and urged SNP ministers to use their “considerable degree of fiscal autonomy” to reduce the burden on workers in Scotland.<\/p>\n
He told MPs he “look[s] forward to hearing … that the Scottish government will be cutting taxes for their taxpayers with the powers and funding that they will get”.<\/p>\n
Meanwhile David Beard, personal finance expert and editor-in-chief of Lendingexpert.co.uk, told Express.co.uk: “Fuel will be a bit cheaper in a couple of weeks once retailers pass on the cut in fuel duty, the national insurance hike next month won’t be quite as bad as previously threatened.<\/p>\n
“You’ll have to wait until 2024 for your income tax to be cut – but none of these measures will come close to offsetting the eye-watering costs of energy or inflation.<\/p>\n
“Don’t be fooled into thinking the Chancellor has been generous today. The Government could and should be doing more to help struggling households.<\/p>\n
“Families need to review their monthly bills, use comparison sites to haggle with providers, pay off interest-bearing debts and budget, budget, budget.”<\/p>\n
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It comes as Conor Matchett, writing for the Scotsman, said the cost-of-living crisis is “a test of SNP priorities”.<\/p>\n
He said Nicola Sturgeon’s Government is “adept at being ‘government in opposition’”, and added: “The Scottish public will be facing rising energy bills, tax increases, food and fuel price inflation and stagnant wage growth.<\/p>\n
“While the argument from the SNP will be to give Scotland the powers to tackle these issues, independence would be years away and any additional devolution would likely be ignored by Boris Johnson.<\/p>\n
“Even if additional powers may help the Scottish Government in hypothetical future crises, what good does banging the constitutional drum do to people facing the choice between heating and eating now?”<\/p>\n