What does the Scottish Budget mean for you?
We recently wrote a blog on the UK budget, which included the highlights and our opinions on several key matters. As a result, we’ve decided to do the same thing with the Scottish Budget, which makes for some interesting comparisons between Scotland and the rest of the UK. If anything, the Scottish Budget can be a more complicated affair, as certain considerations from the UK Budget apply to all UK taxpayers, like National Insurance Contributions and the Personal Allowance. This does, however, put the emphasis on elements that the Scottish Budget does impact directly – like income tax – which is devolved to the Scottish parliament.
The Big Question: Am I paying MORE or LESS Tax?
So, this brings us to the biggest question of all and the one that affects most people directly. It is perhaps best summed up by this table, which was compiled by The Institute of Chartered Accountants in Scotland, as your income tax varies based on how much you earn:
Crucially, everyone is better off when you compare their income tax figures to the previous tax year. However, there is a difference with the rest of the UK. Anyone who earns less than £26,993 in Scotland is better off than the rest of the UK. Anyone who earns more than this figure will have to pay more income tax.
What does this mean for the future?
As with all major Budget decisions, this has far-reaching consequences for the Scottish economy, businesses, and taxpayers. For example, nearly half of all Scottish adults will not need to pay income tax for the following year, which is mainly due to the increased Personal Allowance. And while it may be advantageous for lower earners, it could have serious implications for future jobs and talent pools in Scotland. Murdo Fraser, finance spokesman for the Scottish Conservatives, asserted that the new income tax could impact the ability of Scottish companies to attract potential employees from other parts of the UK. This is particularly because anyone with a salary over £26,993 will pay more income tax in Scotland, which may make it harder for Scottish firms to leverage better contract offers when competing directly with their English counterparts.
Find out more
If you want to find out more about how the Scottish Budget affects you, your business, or your employees, get in touch with Defacto-FD. We are accounting experts who can help you navigate the often-dense world of tax and finances so that you know what you’re up against.