Scottish budget

Surely the wee little cranky is going to spend it on trying to find a way to force through Indy ref 2?

However, I do have a balancing concern that the (relatively modest) extra is spent wisely.

That's the issue really. I'd have no problem paying much more tax if it translated to getting something good out of it.
Our government, from westminster, to hollyrood, to local councils, are utterly crap stewards of that money. Getting worse too it seems, looking at the corruption of the past few years becoming more blatant.

Surely the wee little cranky is going to spend it on trying to find a way to force through Indy ref 2?

..and you wonder why people north of the border no longer want to be part of this ‘union’ - the SNP has a bigger political mandate than any other UK party and support for independence is growing despite the best endeavours of predominantly right-wing media and folks who spout their tripe.

Well I'd feel a lot better about it if we did something to tax people with wealth, not just income although we should be a lot more honest about the actual tax rates and include NI too.

There is also the point that there simply aren't enough people earing those levels of income to make a significant difference.

I had this discussion with some friends lastnight and said that I don't mind if it's spent on the likes of hospitals, education and emergency services. As mentioned above governments and local councils are utter shite at putting money where it's needed.

Well I’d feel a lot better about it if we did something to tax people with wealth, not just income although we should be a lot more honest about the actual tax rates and include NI too.

Indeed I personally would fold NI into one rate of income tax now.
I would remove a lot of the additional allowances and breaks for personal income.
I would want to get be rid of non dom status etc.
As would SNP and Greens in Scotland I believe.

However, none of this is in the Scottish parliament gift. They can vary tax, not design new ones IIRC.

Maybe a stupid question, but I work for a Scottish company but live/work in England.

I assume I still pay English tax rates?

Cutting and pasting my response in the 3.5% thread

Well having moved to Scotland 5 years ago and seen my tax burden rise as a result, I’m quite happy that:

I can get a dentist

Prescriptions are free

My daughter won’t be saddled with an outrageous student loan

My dad won’t be forced to sell his home to pay for care

Easy to forget just how bad some services in The rest of the UK have got.

Surely the wee little cranky is going to spend it on trying to find a way to force through Indy ref 2?

..and you wonder why people north of the border no longer want to be part of this ‘union’ – the SNP has a bigger political mandate than any other UK party and support for independence is growing despite the best endeavours of predominantly right-wing media and folks who spout their tripe.

this.

I believe it will raise an extra £129 million a year.
They have just spent an extra £72 million to complete the ferries.

Maybe a stupid question, but I work for a Scottish company but live/work in England.

I assume I still pay English tax rates?

Of course, as you don't benefit from Scottish taxes - obviously doesn't apply to Non-Dom's 🙂

They have just spent an extra £72 million to complete the ferries.

Truss's Govt cost us (our share) £1bn, in 43 days.

Easy to forget just how bad some services in The rest of the UK have got.

Not that great here. My wife is a teacher and teaching isn't in a great state with the gradual erosion of resource coupled with increasing expectation. Can't get a GP appointment easily and I've just had a hospital appointment for my son cancelled for the 3rd time because of lack of staff and now been punted to Glasgow in March instead of Edinburgh.

Don't mind paying for services - but the disconnect between rising taxes and lowering service does make me doubt the ability of those in charge. I have to deal with quangos enough to know that competence and efficiency are not universally high.

Surely the wee little cranky is going to spend it on trying to find a way to force through Indy ref 2?

🙄 Responded perfectly by Dovebiker
Personally I'd be delighted if they moved the border south and annexed Yorkshire. I'd happily pay more tax if it meant the SNP were in charge rather than those that currently rule in Westminster.

I'm a Scottish high-rate taxpayer, and I don't have an issue with paying taxes for Scotland that will be spent on the services & policies that we vote for - where I do have an issue is with a Govt we don't elect telling the Govt we do elect how much money they can spend and on what.

BTW I've paid high-rate tax since my mid-20's, and when I first went into the band I was quite 'proud'. Proud that someone who left school at 16 was earning enough barely 10 years later to be paying higher rate - obviously this was a long time ago, as now on the 'same' money we'd be just considering we were 'getting by'.

This is going to get worse with the freezing of tax allowances, and I really don't believe that most folk understand how this will impact their income taxes. Frozen allowances and high inflation mean millions more will be in the high rate band each & every year.

Maybe a stupid question, but I work for a Scottish company but live/work in England.

I assume I still pay English tax rates?

Yep - you pay where you live.
I work for English head offices organisation, pay tax at Scottish rate.

Well I’d feel a lot better about it if we did something to tax people with wealth, not just income although we should be a lot more honest about the actual tax rates and include NI too.

And addressed the issue of the self employment NI rate being lower than the employeee rate as well as managing to reduce the number of ‘advantages’ to ‘self employed’ and ‘company directors’ and ‘complex company structures’.

Frozen allowances and high inflation mean millions more will be in the high rate band each & every year.

Assuming of course that high inflation actually results in people getting pay rises, which isn’t a given.

I'll wait for someone to publish the marginal rates of tax once this has settled, but as Nat Ins thresholds are not different in Scotland, the band between £43k where Scottish Higher rate starts and £50k when Nat Ins drops means the marginal rate of tax looks like 42% tax + 12% NI = 54%. And the £100-125k band will now be (effectively) 63% tax and 2% NI = 65% because of withdrawal of personal allowance. Any time the state takes more or your income than you keep yourself, and then drops the marginal rate of tax for those earning more, there's something wrong with the system.

I do have an issue with it

- If you're a sole earner in a household with children paying higher rate tax the UK government claws back child benefit over £50k
- Add to that the extra Scottish tax

Basically the marginal tax rate between £50-60k if you have children is 65% which is frankly obscene.

The amount of unearned wealth sloshing around this country in assets such as property is obscene. Why not do a 1% one off wealth tax on property assets over £300k? A 5% tax on property wealth that's not your primary residece? It was raise an absolute fortune and wouldn't penalise work. It's because it's easy to go after wages and hard to go after the genuinely wealthy.

The system is deliberately designed so the snp cannot make the changes they would like.

If you want to think where the extra money is going.   A nurse on the bottom of the pay scale will be 800 a year higher pay than England

The amount of unearned wealth sloshing around this country in assets such as property is obscene. Why not do a 1% one off wealth tax on property assets over £300k

There are considerable issues with that sort of wealth tax. Charging a tax on illiquid assets is always going to be problematic for people who are asset rich but cash poor. I think it would be better to treat all capital gain as income, remove the capital gain exemption on your primary residence, treat inheritance as income. These would raise a lot more in tax and target wealth rather than just income.

Any time the state takes more or your income than you keep yourself, and then drops the marginal rate of tax for those earning more, there’s something wrong with the system.

The rUK system is barely any different - and you forget those with Student Loans are paying another 9% already, but not in Scotland.

Although the tax burden is higher in Scotland there are several things we receive in return which England and Wales don't get as listed above by Robola. Also several public sector employees (teachers, NHS and police are the ones I know about) are paid significantly more than they would be for doing the same job in England.

Personally I’m just bored of hearing about indyref2. It was meant to be a once I a generation vote and it was ‘no’.

I wish we could go back and try Brexit voting again but it’s just not going to happen. I was a firm remain, couldn’t see any benefit to leaving, and all the (fairly predictable) downsides are now playing out - and becoming clearer as we pull clear of Covid. The Brexiteers got away with it for a bit as it’s been masked by so many other catastrophes but hopefully it’ll come home to roost and hit them firmly in the chops.

The SNP seem loosely bound together just on indyref2 and looking in externally it feels like if they get it they will then implode as they actually have quite differing views on governing. Scotland could actually end up with a weak currency, not a lot of negotiating power with any other country and in a right mess. Albeit at least you wouldn’t be governed by the Tory government who are an utter and corrupt joke.

Hopefully all the people that actually turn up to vote in the uk won’t forget this come general election time and we get them out.

The rUK system is barely any different – and you forget those with Student Loans are paying another 9% already, but not in Scotland.

Not forgetting at all - rUK is different - the £43-50k difference exists in Scotland only because of Nat Ins thresholds and them not being devolved. rUK tax and NI thresholds are aligned. The £100k-125k is little different. I can't find the article at the moment, but I think it suggested the highest marginal rate of tax was in the high 70s% including student loan element.

The amount of unearned wealth sloshing around this country in assets such as property is obscene. Why not do a 1% one off wealth tax on property assets over £300k? A 5% tax on property wealth that’s not your primary residece?

There is an issue generally with later taxation of value which has been legally accumulated under the rules prevailing at the time. Tends to lead to unintended consequences.

What I'd rather see is reformation of Council Tax with the burden increasingly weighted towards higher value property. That's long overdue and is something the Scottish Government could do. It avoids retrospective taxation pitfalls and is hard to avoid.

Maybe a stupid question, but I work for a Scottish company but live/work in England.

I assume I still pay English tax rates?

Yep – you pay where you live.
I work for English head offices organisation, pay tax at Scottish rate.

Not quite as clear as this is it? Depends where your contracted base is not where you communte to it from?

The marginal rate of 54% tax and NI between £43662 and £50k is unfair. So I pay anything over $43662 into a pension. So rather than get 21% the SNP get nothing.

https://www.brewin.co.uk/insights/how-pensions-lower-your-tax-bill-scotland

It also means I don't do overtime and am looking at cutting the hours I work to get just below £43662.

Not quite as clear as this is it? Depends where your contracted base is not where you communte to it from?

Yes, is is as clear as this - it is where you live.

I do have an issue with it..

The 1% rise in itself is just the icing on the cake, we already pay far more in tax than the rest of the uk due to tax bands

I also object to swinney’s statement that ‘we are asking the highest earners to pay they fair share’. He’s not ‘asking’ anything, likewise 43k in today’s climate doesn’t make you rich, far far from it

I’m sitting in a below uk average price house (still with a mortgage), a 9 year old car on the drive, no substantial savings of note yet I earn over that. Meanwhile there are people with far greater assets than me who probably won’t be affected in the slightest.

I didn’t mind paying a little extra when I could afford it, but with any expendable income now taken up through mortgage increases and rising fuel and food costs, I’m now pretty much going to be skint every month.

I’m sure the core snp voter base will be happy with it though, which is all they will care about. Ironically enough I actually voted for them in the last local election…won’t be doing that again

The amount of unearned wealth sloshing around this country in assets such as property is obscene. Why not do a 1% one off wealth tax on property assets over £300k

Such a massive can of worms....

Who decides what value your house is worth? How do you appeal the valuation? There's a reason council tax bands haven't been touched in 20 odd years - no one dares go near them....

Plus, asset rich cash poor pensioners - my in-laws are on tiny pensions but have a massive 5 bed mansion - they would struggle to raise the cash to pay a tax on it.

Plus, asset rich cash poor pensioners – my in-laws are on tiny pensions but have a massive 5 bed mansion – they would struggle to raise the cash to pay a tax on it.

I’m assuming this is bait…

To be a higher rate taxpayer you are one of the richest in our society.  You may not feel itbut its the truth

I’m assuming this is bait…

Not intentionally - but not everyone with assets has disposable income, so getting your wealth tax collected would be far from trivial...

Council tax is the closest we have to an asset tax as it supposedly based on the value of your home and no one has dared go near that for decades to update it.....

It's a lazy way of bringing in more tax, you're hitting those who are basically PAYE and allowing those who avoid tax to continue as is.

The thing that always strikes me is a statement i heard a while ago, normal people fear debt, the rich love it, they can offset any outgoings such as tax simply through management of their portfolio against debt, what the Scottish Government has done isn't going to affect that in any way by the sounds of it, same as those who are self employed and able to manage their income via salary, bonuses and benefits in kind.

To be a higher rate taxpayer you are one of the richest in our society. You may not feel itbut its the truth

Depends how you determine wealth tj. If it’s purely based on income before outgoings then maybe

If you are on 43k with a wife and 3 kids to provide for and a mortgage to pay you will definitely not be one of the richest in society.

If we factor in assets then someone like me would be even further down the order of wealth.

@argee What would you suggest they do to combat that kind of tax avoidance, which would be within the scope of the powers devolved to the Scottish Parliament?

The amount of unearned wealth sloshing around this country in assets such as property is obscene. Why not do a 1% one off wealth tax on property assets over £300k

Says the man who clearly doesn't live in SE England. £300k might buy you a 3 bed semi. Hardly wealth tax territory.

I’m sure the core snp voter base will be happy with it though, which is all they will care about. Ironically enough I actually voted for them in the last local election…won’t be doing that again

And you'd prefer to be the same as an English taxpayer on £43k?

Sure you kids will love it when they're paying back their Uni at 9% of their income.

This is what happens when a Govt isn't in total control of its finances (income & spending) and is also forced to contribute to policies/processes/Brexit/corruption/etc that weren't voted for here.

There are considerable issues with that sort of wealth tax. Charging a tax on illiquid assets is always going to be problematic for people who are asset rich but cash poor. I think it would be better to treat all capital gain as income, remove the capital gain exemption on your primary residence, treat inheritance as income. These would raise a lot more in tax and target wealth rather than just income.

It would make wealthy people unhappy which is the main problem. Taxing income at heinous marginal rates is problematic and difficult for people who are asset poor but cash rich but yet here we are.

If you've created a system where a working parent on upper rate would be financially better off dropping to a 4 day working week you've ****ed up.

They're also sneaky - the 42p vs 40p in England is misleading and makes it sound better than it is. At the margins the big issue is the threshold is much lower in Scotland (£43k vs £50k) and there is 21p/20p basic rate difference.

The reality is someone on £50k/yr in Scotland loses an addition 3% (£1.5k) of their income.

It would make wealthy people unhappy which is the main problem. Taxing income at heinous marginal rates is problematic and difficult for people who are asset poor but cash rich but yet here we are.

Oh I agree my suggestions are vote losers for sure but they are fair, or at least I think they are.

If you’ve created a system where a working parent on upper rate would be financially better off dropping to a 4 day working week you’ve **** up.

I'm pretty sure we don't have that situation even with the messed up rates that we currently have. The highest marginal rate that we have is (I think) 70%. Now don't get me wrong that is ridiculous but you will still be "better off" earing more and paying tax at that rate than not earning it at all. Whether the financial gain is "worth it" to the individual is a different question.

And you’d prefer to be the same as an English taxpayer on £43k?

Yes I would far prefer it. I don’t have kids so the uni fees are irrelevant to me and despite paying far more tax than my English coworkers, the services in Scotland are just as shit

I guess I save 5 quid on my free prescription every 2 months so that’s a benefit I suppose.

I’m pretty sure we don’t have that situation even with the messed up rates that we currently have.

It's the clawback of child benefit in the £50-60k range that tips it over the edge.

Say you work full time for £50k, you will get £50k plus £2.6 CB
Your take home will be £36K + 2.6 = £37.6k

Your mate has a slightly better job which pays £60k, which loses him all the CB and gives him a takehome of £41,776. However, he can cut back to 4 days, £50k a year save 1 day a weeks child care costs and be quids in.