As part of today’s debate on the principles of the Scottish Budget, the Scottish Government has released further detail on its intention to increase income tax.

In addition to the creation of a new starter rate, and the introduction of previously announced intermediate bands, the level at which tax payers enter the higher rate has been further reduced from the initial proposals presented in December.

The higher rate will now begin at £43,431, compared to £44,274 presented in the initial Draft Budget. This means that higher rate taxpayers in Scotland will enter that tax band earlier than their counterparts in the rest of the UK, while also paying a higher overall rate.    

Reacting to the changes, Liz Cameron, Chief Executive, Scottish Chambers of Commerce said:

SCC has repeatedly warned of the unintended effects of increasing taxation in Scotland out of step with the rest of the UK. Although SCC welcomes progress on the budget process, this should not come at the expense of making Scotland a less attractive part of the UK for skilled employees to locate and work, or for businesses to recruit and invest.”