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<\/figure>\n<\/div>\nWhile the Budget offered some\u00a0crowd-pleasing measures,\u00a0it\u00a0failed to\u00a0deliver meaningful change, writes CHRIS BARBER<\/strong><\/h4>\n
\nThe Finance Secretary\u2019s announcement to increase the\u00a0amount at which the\u00a0basic\u00a0and intermediate income tax thresholds\u00a0starts\u00a0by 7.4%, to \u00a316,538\u00a0and \u00a329,527 respectively, appears welcome news for low low-income earners.\u00a0However,\u00a0at\u00a0only\u00a0\u00a311 per year extra in their pockets, this hardly represents any difference\u00a0to\u00a0overall\u00a0livelihoods.\u00a0<\/p>\n
These threshold increases also\u00a0won\u2019t\u00a0deliver a meaningful rise in\u00a0fiscal\u00a0revenue, given that 69% of Scotland\u2019s income tax is raised from the top three tax bands.\u00a0\u00a0<\/p>\n
With no change to the rest of the income tax bands in Scotland,\u00a0more people will be dragged into higher tax bands as wages increase with\u00a0inflation,\u00a0and\u00a0so will end up paying more tax.\u00a0The greater\u00a0number of income tax bands\u00a0in Scotland\u00a0compared to the rest of the UK\u00a0also\u00a0means that\u00a0this\u00a0fiscal drag is more pronounced.\u00a0<\/p>\n
This, coupled with\u00a0no\u00a0changes\u00a0to the Land and Building\u00a0Transaction\u00a0Tax (LBTT)\u00a0bands,\u00a0means we\u00a0will see greater tax bills for many people.\u00a0We think there should be greater alignment with taxation in the rest of the UK \u2013 particularly around the intermediate and higher rate thresholds.\u00a0<\/p>\n
While it is good to see no\u00a0additional\u00a0income tax bands,\u00a0we\u2019re\u00a0frustrated that our repeated calls for a simpler tax system continue to go unheeded. Scotland\u2019s tax system is needlessly complex, and the annual round of tinkering with already complicated legislation adds further uncertainty, reduces transparency, and undermines public understanding.\u00a0<\/p>\n
The introduction of two new council tax bands broadly mirrors the UK model and is a welcome first step\u00a0towards council tax reform, long promised by the government. However,\u00a0this announcement comes\u00a0before\u00a0the current\u00a0consultation\u00a0on a full review of council tax has concluded or reported.<\/p>\n
This\u00a0limits proper\u00a0scrutiny and\u00a0appears\u00a0to make policy decisions without the necessary input from experts.\u00a0With only around 11,000 homes valued over \u00a31 million in Scotland, the revenue impact is also likely to be modest.\u00a0<\/p>\n
The proposals to introduce a 15% relief on non-domestic rates over three years and\u00a0a\u00a0commitment\u00a0to reduce\u00a0the\u00a0basic,\u00a0intermediate\u00a0and\u00a0higher\u00a0property\u00a0rates\u00a0in 2026?27\u00a0will be welcomed\u00a0by the retail retail,\u00a0hospitality\u00a0and leisure sectors.\u00a0However, Scotland\u2019s\u00a0non-domestic\u00a0rates have\u00a0historically\u00a0been higher than those seen in the rest of the UK, so this is government playing catch up.\u00a0\u00a0<\/p>\n
There was little detail\u00a0about what else this government will do to support business growth, nor was there any\u00a0clarity on the Scottish Government\u2019s long-term model for growth.\u00a0Good policy decisions should consider long term\u00a0objectives, risks and opportunities and not\u00a0only\u00a0respond to immediate pressures.<\/p>\n
Chris Barber is the chief financial offficer at ICAS\u00a0<\/em><\/p>\n>Latest Daily Business news\u00a0<\/em><\/p>\n\nLike this:<\/h3>\n
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