Scottish budget
Higher earners to shoulder tax burden as cost-of-living crisis continues
Higher earners to shoulder tax burden as cost-of-living crisis continues
Commenting on the Scottish Budget, Vishal Chopra, KPMG UK’s Head of Tax in Scotland, said:
“Ahead of this budget, interim finance secretary John Swinney had some difficult decisions to make against a turbulent economic backdrop. If he wanted to inject stability in public finances and give additional support to certain sectors and households, tax increases, and spending cuts were inevitable.
“To combat the cost-of-living crisis, higher earners were chosen to shoulder more of the tax burden. As expected, Mr Swinney followed Westminster by reducing the threshold at which Scottish taxpayers start to pay the top rate of tax from £150,000 to £125,140.
“Mr Swinney also increased the higher rate of tax from 41p to 42p in the pound and the top rate from 46p to 47p, further increasing the disparity with taxpayers South of the border.
“Starter, basic and intermediate, and higher income tax thresholds have also been frozen in line with Westminster, which effectively means a tax increase for many as they enter the higher tax bands as their salaries rise - although this will impact all taxpayers, not just the highest earners.
“This budget also addressed the obvious challenges for business to create employment opportunities and growth by freezing business rates at 22/23 levels and extending the Small Business Bonus – moves which will be welcomed, especially by those in the hardest hit sectors.
“Landlords, property investors, and second homeowners will also pay more tax with the LBTT additional dwelling supplement set to increase from four per cent to six per cent.
“This Scottish budget, delivered during a veritable winter of discontent, was all about preparing for even harder days ahead. With Christmas fast approaching, Mr Swinney will have hoped to spread universal cheer, but given the hard decisions he had to make, pleasing everyone this festive season was always going to be an impossible task.”
ENDS
For media enquiries, please contact:
Rory Brown
Senior Manager, Media Relations
M: +44 (0) 751 0374 794
KPMG Press Office: 020 7694 8773
About KPMG UK
KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 15,300 partners and staff. The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.
KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.