The Scottish Government announced the details of its budget on Thursday, amid the ongoing cost-of-living crisis.
Deputy first minister John Swinney set out Scotland’s budget for the coming year, announcing that income tax rates and thresholds would be altered so those earning the most would pay more.
Ferret Fact Service looked at this claim and found it Mostly True.
The Scottish budget was announced on 15 December 2022, setting the Scottish Government’s spending priorities for the coming financial year.
The details are revealed in a statement to the Scottish parliament. The BBC reported that income tax for high earners was expected to be increased in Scotland for the next financial year. This was then confirmed in Swinney’s budget statement.
What has changed?
Swinney announced that changes would be made to income tax in order to increase health resource spending above the amount that Scotland receives through the Barnett formula, which calculates the annual block grants for the devolved nations of the UK based on spending in England.
Scotland’s rate of income tax is different to the rest of the UK. There are five bands: the starter rate, the basic rate, the intermediate rate, the higher rate and the top rate.
A number of changes to these rates have been made in the Scottish budget. The top rate threshold will be reduced from £150,000 to £125,140.
Earnings in the higher rate bracket will be taxed at 42 per cent instead of 41 per cent, and the top bracket will increase from 46 per cent to 47.
The personal allowance — the amount you can earn before being taxed — is set by the UK Government, and will remain at £12,570.
What did the SNP say in its manifesto?
The SNP won the most seats in the 2021 Scottish parliament elections, and formed a coalition government with the Scottish Greens.
The party’s manifesto made a number of pledges relating to income tax. On page four, the manifesto promised to “freeze income tax rates and bands and increase thresholds by a maximum of inflation”.
This was repeated on page 46, stating: “Over the course of the next parliament we will: Freeze income tax rates and bands”.
Later in the manifesto document, this statement is expanded upon.
“While it is important for any government to have flexibility to respond to a change in circumstances. Our aim is to maintain current income tax rates for the duration of parliament and increase thresholds by a maximum of inflation.”
On the party’s website in an article called “What are the SNP policies at the 2021 Scottish Election” there is a pledge to “freeze income tax rates and bands, and increase thresholds by a maximum of inflation, to keep money in people’s pockets.”
In the Scottish budget, the top income tax rate was changed for top earners from 46 to 47 per cent, while the threshold for the top rate of tax was reduced by nearly £25,000.
Ferret Fact Service verdict: Mostly True
The SNP’s manifesto did make a commitment to freezing income tax rates and bands. The Scottish budget increased the top rate of tax and lowered the threshold required to qualify for the highest rate. In the details of the manifesto, the party says maintaining current income tax rates was its “aim”, however this caveat is not included on the SNP website article.
Cover image thanks to ScottishPolitico