In the News
Scotland raises higher rates of income tax to help fund increased NHS spending
Did you know that Scotland has a different income tax system to the rest of the UK? You do now, if only because Deputy First Minister, John Swinney, announced tax changes in his Budget today. The tax rises are explicitly meant to increase NHS funding in Scotland. Everyone earning more than £43,662 in Scotland will have to pay more income tax in 2023 and the move is expected to raise about £90 million.
The top marginal rate of income tax, has been increased from 46% to 47%, for those Scots earning more than £125,140, and the higher rate from 41% to 42% for those earning more than £43,662.
In fact, the Scottish system has five different tax bands, something that I didn't know, although it will be interesting to ascertain the extent to which this affects things like total tax revenues, the opportunity cost of collection per capita, and comparative levels of tax avoidance.
Around 18,000 Scots pay the top marginal rate of income tax, and 387,000 the higher rate.
Almost 40% of workers in Scotland don't pay any income tax and 24% are on the basic rate.
According to the Institute for Fiscal Studies (IFS), someone earning £50k each year in Scotland will pay £1,552 more income tax than someone on the same salary in England.