Majority of Scots now pay higher taxes under SNP government

By Lucy Ashton

SNP claims that the majority of working Scots pay less income tax than those south of the border are no longer true, the Scottish Conservatives revealed today.

Analysis of the most recent earnings data shows that, because the nationalist government has not increased tax thresholds in line with rising salaries, the boast no longer stacks up.

At the end of last year, the Scottish Government admitted that everyone who earned over £27,850 paid more in income tax here. But, using recently published wage growth data, the Scottish Conservatives have calculated that the average Scot will earn £29,095.50 in 2023, well above this threshold.

The shadow finance and economy secretary, Liz Smith, pictured right, said SNP ministers’ stealth tax rises have finally caught up with them.

She insisted they must stop making the claim that the majority of Scots pay less tax than people elsewhere in the UK because it is just not true. Indeed, overall, Scotland is the highest taxed part of the UK.

She added that the tax gap between Scotland and the rest of the UK is already a serious problem – something that is acknowledged by business – and any further increase would do untold damage to our competitiveness.

Liz Smith MSP said: “SNP ministers must stop using this claim immediately, as it no longer stands up to scrutiny.  Failing to increase tax thresholds in line with rising wages, amounts to a tax hike – and these stealth tax rises have finally caught up with them – and thousands of Scots on relatively modest incomes.

“This boast was always based on careful, cynical spin anyway, because the ‘majority’ were paying a minuscule amount less tax than those south of the border, while the rest were paying substantially more.

“It was a clever bit of smoke and mirrors designed to disguise the fact that Scotland is by far the highest taxed part of the UK.

“But, even on its own terms, the claim is simply untrue now – and ministers must admit as much.

“Scotland is already at a competitive disadvantage with the rest of the UK because of the higher taxes imposed by the SNP.

“Worryingly, Humza Yousaf – doubtless inspired by the extremist Greens – is talking of widening that gap further. That would deliver another hammer blow to the Scottish economy and hard-working Scots.” 

In 2022, the median pay for all employees in Scotland was £27,710. (SPICe, 27 February 2023, link). 

The Scottish Government state that everyone earning more than £27,850 pays more income tax in Scotland. At the time of publishing the 2023-24 budget, they said this constituted 48% of Scottish taxpayers. (Scottish Government Income Tax Fact Sheet 2023-24, 15 December 2022, link).

The median Scottish wage is set to grow to £29,095.50 in 2023. Average earnings are forecast to grow by 5% in 2023 according to the Office for Budget Responsibility. Given that average earnings in Scotland were £27,710 in 2022, then applying a 5% growth rate to this figure produces a value of £29,095.50. (SPICe, 27 February 2023, linkOBR Economic and fiscal outlook march 2023, 15 March 2023, Table A.1, link).

This means the SNP’s claim that most taxpayers in Scotland pay less tax is no longer true. Announcing the 2023-24 budget, John Swinney said: ‘The majority of people in Scotland will still pay less in taxation than if they lived in the rest of the United Kingdom.’ However, given that in 2023 the median wage in Scotland will be higher than the £27,850 cut off point, this claim is no longer accurate. (Official report, 15 December 2022, link).

Deputy First Minister Shona Robison is one of many SNP politicians to claim that that majority of Scots will be paying less income tax. As reported in the Evening Standard, Shona Robison said: “The additional revenue will help us invest in our vital public services including the NHS, above and beyond the funding received from the UK Government. At the same time, the majority of taxpayers in Scotland will still be paying less income tax than if they lived in the rest of the UK.” (Evening Standard, 6 April 2023, link)

Scotland is the highest taxed part of the UK. The Scottish Fiscal Commission noted that: “We estimate that the total divergence in Scottish and UK income tax policy since 2017-18 is contributing around £1 billion to the income tax net position in 2023-24.” This shows that Scots have been taxed £1 billion more than counterparts in the rest of the UK. (Scottish Fiscal Commission, 15 December 2022, link)

Humza Yousaf claimed he was “very interested” in proposals to raise taxes even further. In an address to the STUC annual conference, Humza Yousaf said: “However, on progressive taxation let me say unequivocally that I think there is scope for us to go even further. Taxes are, of course, set in budgets so I can’t make any particular announcement today, but I was very interested in the report on this subject which the STUC published at the tail end of last year and I’m very keen to make an early start in exploring the various different options.” (Scottish Government Publication, 17 April 2023, link)

Leave a Reply