Middle earners in Scotland will be lumped with a higher tax bill than in other parts of Britain next year under SNP plans unveiled today.
Nicola Sturgeon said she would freeze rates for all bands, but would not pass on George Osborne’s tax cut for higher ratepayers.
It means those Scots earning £45,000 or over next year will have to stomach income tax demands at least £300 higher than their counterparts in the rest of the UK.
Critics are warning that higher taxes here in comparison with the rest of the UK will damage the Scottish economy by deterring skilled labour and risking the relocation of businesses.
While Ms Sturgeon has rejected Mr Osborne’s raising of the higher rate threshold to £45,000, the level at which people pay that in Scotland will rise with inflation.
Next year it will go up from £43,000 to £43,387.
The plans, which were laid out at the Royal Hospital Children, also include:A nil rate band which raises the amount Scots can earn before paying any income tax to £12,750 from £11,500 No change to the additional rate as the SNP retreats from a 45p to 50p rise for those earning at least £150,000 Basic ratepayers, which account for about 85% of the population, to pay no more tax during the next five yearsMs Sturgeon said: “No taxpayer will their bill increase as a result of these Scottish Government proposals. In 2017/18, instead of a large tax cut we will ensure the higher rate threshold rises only by inflation.”
She added higher earners foregoing Mr Osborne’s tax cut would be offset by the attraction of free tuition fees, free personal care and free prescriptions in Scotland.
She said the SNP’s proposals are likely to raise £1 billion over the next five years in extra revenue.
Scottish Labour says that will not be enough to fight austerity.
Leader Kezia Dugdale said: “Instead of ending austerity in Scotland, this means billions of pounds of Tory cuts passed on to Scotland’s public services. Nicola Sturgeon must now tell people where these cuts will fall.”