11/02/2020

Scottish budget 2020 reveals there will be no changes to income tax rates

11/02/2020

Scottish budget 2020 reveals there will be no changes to income tax rates

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There will be no changes to income tax rates in the 2020-21 tax year, the government have declared.

The 2020 budget was set out by Public Finance Minister Kate Forbes, who stepped in to replace Derek Mackay after he resigned on Thursday morning.

She revealed that tax rates will not rise, however, the upper rate thresholds will be frozen.

On top of this, the budget also committed itself to providing extra funding for sectors such as education, investment and healthcare in a bid to confront the “climate emergency”.

Ms Forbes urged MSPs to “work constructively” with the SNP to pass the budget in the interest of the nation.

She stated the budget “offers vision and leadership at a crucial moment for our country” and “has wellbeing and fairness at its very heart.”

Should the proposed plans be approved, the current tax rates in Scotland will see no increase.

However, the threshold that dictates when people begin to pay the basic and intermediate rate will rise with inflation.

The caps for the upper and higher rates will be frozen, with Ms Forbes branding it the “most progressive, fair and balanced income tax system in the UK”.

Speaking of the new plans, she said: “That will ensure that 56% of Scottish taxpayers pay less than they would if they lived elsewhere in the UK.

“Scotland will continue to be the lowest taxed part of the UK for the majority of income taxpayers.”

Aside from this, the budget proposed funding in the billions across the different sectors, including:

  • £117m worth of investment in mental health for all ages and stages of life
  • A record investment of £15bn for health and care services
  • An increase of 60% in funding to help reduce harm from drugs and alcohol
  • £180m towards closing the attainment gap in schools
  • £270m for rail services
  • A 3% pay uplift for those working in the public sector up to £80,000

The budget’s main focus, however, was on environmental issues, with Ms Forbes going on to say: “We promised this would be a budget that steps up the delivery of our ambition to tackle climate change. Today we deliver on that promise.

“Scotland’s transition to net-zero emissions is a national endeavour and changes are needed across the whole of society.

“This budget confirms that the Scottish Government will play its part, guided by the expert advice provided by the Committee on Climate Change and the Climate Emergency Response Group.”

She laid out plans to put £1.8bn of capital investments into projects designed to reduce emissions alongside increased funding of active travel, agriculture, electric vehicles and peatland restoration.

The budget bill will now be submitted to parliament, giving Ms Forbes three weeks to gain traction from other MSPs and secure a deal before it is voted on.

Whilst her opposing colleagues gave her praise for stepping up to present the budget, its content was met with criticism.

Conservative MSP Murdo Fraser clapped back at the Public Finance Minister, stating they could not support her announcement on tax thresholds as it will “widen the tax differential”.

Rhoda grant of the Labour party claimed the SNP government left “our country, our people and our essential services worse off” and demanded that they “come clean with the people of Scotland and tell them what choices they are making on their behalf”

She branded the budget “a disappointment” and stated it “lets down the Scottish people”

This was added to by further criticism from Scottish Green co-leader Patrick Harvie, who called the budget “timid”, and leader of the Lib Dems Willie Rennie, who said it didn’t provide councils what they need.

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