No adjustments to Scottish earnings tax plan, Shona Robison says | EUROtoday

The Scottish authorities won’t improve earnings tax charges or introduce new bands in subsequent yr’s Budget, Finance Secretary Shona Robison has mentioned.

However, selections on thresholds for bands might imply that larger earners in the end pay extra tax.

Robison mentioned she needed to supply “certainty” after Chancellor Rachel Reeves introduced the UK Budget.

Reeves defended her plans – which is able to result in Scots paying extra earnings tax and National Insurance – as “fair”.

Holyrood ministers have used their devolved powers to arrange a definite earnings tax system, with seven bands in contrast with the UK’s 4.

Robison mentioned the Scottish authorities would keep on with its tax technique, which set out plans to not change earnings tax charges or introduce new bands earlier than the Holyrood election in May.

However, the finance secretary didn’t touch upon pay thresholds.

“I’ve already set out in the tax strategy the position we wanted around stability with no changes to rates and bands,” she advised advised BBC Radio Scotland Breakfast.

“That is the position we had and that the position we maintain.”

The tax technique additionally units out a dedication that almost all of Scottish taxpayers ought to pay much less earnings tax than folks in the remainder of the UK.

To fulfil that, the Scottish authorities can be anticipated to make adjustments to the starter and fundamental bands of earnings tax subsequent yr.

The tax technique states that these bands ought to improve “by at least inflation”. It additionally says the edge for larger, superior and prime bands will stay unchanged, which means extra folks pays the next fee as their wages improve.

Robison mentioned: “Well in Scotland, of course, a majority of taxpayers do pay less than in the rest of UK, and that’s a position we want to maintain.

“But we now have requested those that earn extra to pay a bit extra, as a result of we consider in that collective place that for those who consider in society, then folks must make a contribution.

“And we believe those with the broader shoulders should make a bit more of contribution.”

The Scottish Fiscal Commission (SFC) cautions that difficulties in measuring earnings and tax figures imply it can not present a “definitive” reply about whether or not extra Scots pay earnings tax than they might elsewhere within the UK.

When contemplating gross figures, it mentioned nearly all of Scottish taxpayers have been paying extra earnings tax than they might have if that they had lived elsewhere within the UK in every of the previous two monetary years.

But it additionally supplied internet figures which indicated the other.

For 2025-26, the SFC estimated {that a} majority of Scots would pay much less earnings tax than they might elsewhere within the UK underneath each gross and internet figures.

Robison had beforehand warned that she might must revisit her tax plans if Reeves hiked charges south of the border.

The chancellor had hinted at that chance earlier than U-turning.

Although such a hike wouldn’t straight have an effect on Scotland, it could result in an automated reduce within the Scottish Budget underneath devolved funding preparations – resulting in warnings of a possible earnings tax rise north of the border.

Instead, the chancellor introduced an extension to a freeze on UK earnings tax and National Insurance thresholds till 2031.

Robison mentioned that might not have an effect on the Scottish Budget for 2026-27, which is because of be introduced on 13 January.

The finance secretary described the UK Budget course of as “chaotic” following weeks of hypothesis and a sequence of leaks.

She added: “But now we’re back to a bit more certainty then, of course, we want to return to position of our tax strategy.”

Reeves acknowledged that her tax and spending plans – together with adjustments to money Isas and levies on pensions – would “impact on working people”.

However, she advised BBC Radio Scotland Breakfast that the adjustments had been “fair”.

The chancellor has additionally been criticised by vitality companies, who had known as for a 78% levy on North Sea oil and fuel income to be lifted.

Reeves mentioned the UK Budget would ship an additional £820m to the Scottish authorities within the coming years.

She added: “But money always has to come from somewhere, and it is right that we ask the energy companies to make a fair contribution to fund public services in Scotland.”

At First Minister’s Questions at Holyrood, Scottish Conservative chief Russell Findlay mentioned the SNP had damaged its 2021 manifesto pledge to not improve earnings tax, including that John Swinney “cannot be trusted” to not hike charges.

He known as for the funding the Scottish authorities had put aside to mitigate the two-child advantages cap – which the UK authorities has now introduced it’s going to scrap – for use to chop earnings tax, arguing that staff deserved to maintain extra of their “hard-earned money”.

The abolition of the cap is anticipated to avoid wasting the Scottish authorities about £120m in 2026-27.

Swinney advised Findlay that ministers needed to be aware of the financial context when making selections on tax, citing the warfare in Ukraine and the “utter stupidity” of the Liz Truss mini-budget.

Scottish Labour chief Anas Sarwar advised MSPs that the UK Budget would ship “the greatest reduction in child poverty from a single budget this century”, whereas additionally pointing to an increase within the minimal wage.

Swinney welcomed the abolition of the two-child cap, however mentioned the Labour authorities needed to be “shamed into action”.