Thousands of people face income tax hike in Scotland as SNP creates new tax band for those earning over £75,000

19 December 2023, 16:01

Shona Robison made the announcement during her Budget statement at Holyrood
Shona Robison made the announcement during her Budget statement at Holyrood. Picture: Alamy

By Asher McShane

A new tax band of 45p in the pound will be created in Scotland, the Deputy First Minister has announced.

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Shona Robison said in her Budget statement at Holyrood on Tuesday that the "advanced" band will apply to those earning between £75,000 and £125,140.

The top rate of tax, levied against those earning above this figure, will rise by 1% next year to 48p in the pound.

In other areas of tax, the three lowest rates will see no increase to their rates while the starter and basic rate bands will increase by the level of inflation.

The changes will bring in another £1.5 billion to Scotland's finances next year, Ms Robison said.

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She also said the Scottish Government will fully fund its proposed council tax freeze, providing local government with the equivalent of a 5% rise.

Ms Robison told MSPs the Office for Budget Responsibility projection for inflation next year is 3%, but she wants to "go further than that".

She said: "That's why I will fund an above inflation 5% council tax freeze - delivering over £140 million of additional investment for local services.

"Combined with the other support being provided to local government, this will increase their overall funding by 6% since the last budget, taking local government funding to a new record high of over £14 billion."

Councils will be provided with £1.5 million to wipe out school meal debt incurred by pupils across Scotland.

"Due to Westminster mismanagement of our economy, too many households are worrying about debt," Ms Robison said.

"With our limited powers there is only so much we can do. However, where we can step in, we will.

"That is why I am pleased to confirm we will provide local authorities with £1.5 million to cancel school meal debt, removing a worry hanging over families up and down the country who are struggling to make ends meet."