NICOLA Sturgeon has warned the super-rich will be “laughing all the way to the actual bank” – suggesting that her Government will not follow Westminster and abolish the top rate of income tax.
Chancellor Kwasi Kwarteng unveiled his growth plan in a mini budget in the Commons – abolishing the top rate of tax south of the border – replacing the 45 per cent rate for the super-rich with the 40% threshold.
As things stand, anyone earning more than £150,000 in Scotland will pay a top rate of 46%.
The First Minister has suggested that there will be pressure on the Scottish Government that it “blindly follows suit”, but has heavily criticised the UK Govenrment’s strategy.
Mr Kwarteng has also brought forward the planned cut to the basic rate of income tax to 19p in the pound a year early to April lower than Scotland’s current basic rate of 20%.
READ MORE: Mini-Budget: Chancellor abolishes top rate of tax in England
The Scottish Government will be handed more than £460m from the Treasury due to the announcement to cut income tax.
But the First Minister has blasted the abolition of the top rate of income tax.
Writing on Twitter, Ms Sturgeon said that “the super wealthy will be laughing all the way to the actual bank”, adding that she suspects “many of them will also be appalled by the moral bankruptcy of the Tories”.
The First Minister said that the top rate of tax has been cut “while increasing numbers” of people are relying on food banks due to “the incompetence and recklessness of this failed UK Government”.
The First Minister branded the mini budget a strategy that “benefits wealthiest over poor/middle income earns, tanks the pound, pushes up the cost of borrwing and is castigated as reckless”.
She suggested that there will be pressure on the Scottish Government that it “blindly follows suit”.
Deputy First Minister John Swinney, who is acting as the Finance Secretary, said he was disappointed with the measures announced in the mini budget.
Mr Kwarteng also announces cuts to stamp duty south of the border, with the Scottish Government responsible for Land and Buildings Transition Tax in Scotland.
Mr Swinney said: “The Chancellor’s statement today will provide cold comfort to the millions of people across Scotland who have been looking for the UK Government to use their reserved powers to provide support for those that need it most.
“Instead we get tax cuts for the rich and nothing for those who need it most.
“We estimate that the increase in the price cap to £2,500 will force an estimated 150,000 more Scottish households into extreme fuel poverty.
“Instead of offering these people support, the Chancellor is threatening to cut their family budgets further, with a new regime of benefit sanctions.”
The Deputy First Minister added: “In terms of the growth plan, the UK Government are borrowing to give tax cuts to the wealthy, lowering regulatory standards and inflating an already booming housing market.
“This will lead to a growth in inequality, not a growth in public services or improving the quality of life for many.”
Referring to the potential of following suit with land and buildings transition tax and income tax, Mr Swinney said that “the Scottish Government will set out its plans as part of the normal budget process”.
Mr Kwarteng said that investment zones would be set up, including potentially north of the border in a bid to boost economic growth.
Mr Swinney said his Government will “have a close look at the investment zones being proposed”.
He added: “They have to be the right fit for Scotland.
“We will keep discussing these plans with the UK Government as we move forward.”
The Chartered Institute of Taxation has warned that without action from Holyrood, “all Scottish taxpayers earning more than £14,732 will now pay more income tax compared to taxpayers in the rest of the UK” from next year.
Sean Cockburn, chair of the Chartered Institute of Taxation’s Scottish technical committee, said: “Bringing the reduction to the UK basic rate forward by a year means that, as things stand, from next year, Scottish ministers will be unable to say that some Scots face lower tax bills compared to the rest of the UK.
“We won’t know how the Scottish Government intends to respond until later this year so absent this detail, it raises the prospect that all Scottish taxpayers earning more than £14,732 will now pay more income tax compared to taxpayers in the rest of the UK.
“As an illustration, someone in Scotland earning £27,850 would have paid the same amount of tax as someone living in the rest of the UK this year. The changes announced by the Chancellor mean that from next year, they would pay £152.80 more.”
He added: “The abolition of the additional rate tax raises the prospect of significant income tax divergence for taxpayers with income above £150,000.
“In Scotland, the ‘top’ rate of tax (as it’s called) is charged at 46p. Someone earning £200,000 next year would pay £6,045.80 more in income tax compared with someone in the rest of the UK”.
Denial of responsibility! Planetcirculate is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.