According to a recent announcement, Scottish employees who make more than £43,662 year will have to pay an additional income tax in 2023.
First Minister Nicola Sturgeon is raising both the top and higher rates of income tax by 1p, which would make middle-class people who are already suffering from the cost of living issue even worse off.
It indicates that the higher rate in Scotland will increase to 47p and shift to 42p.
This would also widen the income tax gap between Scotland and England, where the top rate is still 45p and the higher rate is still 40p.
In addition, the Scottish Government announced a further tax raid by reducing the highest income tax rate threshold from £150,000 to £125,140.
This follows Chancellor Jeremy Hunt’s in England’s course of action. In Scotland, the higher rate threshold will remain at £43,663.
John Swinney, Ms. Sturgeon’s deputy, announced the tax increase Thursday afternoon in Holyrood when presenting the Scottish Government’s budget.
The SNP pledged in its campaign to freeze income tax rates and bands and raise thresholds by a maximum of inflation before the Scottish Parliament election last year.
However, Mr. Swinney cited “enormous demands on the public budget” as the reason why the SNP’s objectives had to be modified.
The Deputy First Minister said, “In the most tumultuous economic and financial climate most people can recall,” the Scottish Government budget for the next year was created.
In addition, Mr. Swinney criticized Liz Truss’ “utterly disastrous judgments” made at her “mini-budget” in September.
He promised that the extra revenue from the income tax increase will be used to increase investment on the Scottish NHS by £1 billion.
Mr. Swinney told the Scottish Parliament, “If we want to be able to rely on the NHS, we have to be willing to pay for it.
“When the UK government released its fall statement, it resulted in £291 million in additional funding for the NHS in Scotland.
“I plan to pass down that money boost, but I don’t think it’s close to enough for the crucial role we require our NHS employees to perform.”
Because of the decisions I have taken over income tax, I will be able to boost spending on health and social care in Scotland by nearly £1 billion in a single year.
Additionally, Mr. Swinney said that the Scottish Government will withdraw its £20 million plan to finance a second referendum on independence.
After the Supreme Court ruled earlier this month that the Scottish Parliament cannot pass legislation calling for an independence referendum without the consent of Westminster, he said that the money would be intended to support those at risk of fuel poverty.
Mr. Swinney assured MSPs that the Scottish Government will “make financial arrangements for that to happen” when the “opportunity is open” for a referendum.
However, he said, “At this time, I must use all of the resources at my disposal.”
“I want to use the money set up for an independence referendum to cover provision to prolong our fuel insecurity fund into next year, a further £20 million to address yet another failure of the United Kingdom and its policies,” the statement reads.
The budget statement had already been postponed for more than 30 minutes as Scottish Parliament authorities looked into a report that the BBC had allegedly been given information about the fiscal package.
»In 2023, Scots earning above £43,662 will pay extra income tax«