Income tax in Scotland to stay the same as rest of UK

Income tax in Scotland is to stay at the same level as the rest of the UK for the next year.

MSPs voted to set the Scottish rate of income tax (SRIT) at 10p, which means the tax paid by Scottish residents in 2016/17 will be the same as taxpayers in the rest of the UK.

Labour and the Liberal Democrats had proposed increasing the rate by 1p, which they say would raise £500m and avoid cuts to education and local services.

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Scottish Labour leader Kezia Dugdale has said: "Given the choice between using our powers or making cuts to our children's future, we choose to use our powers.”

But in the first year that Scotland has had the power to vary its rate of income tax, MSPs voted 74 to 35 to stay in line with the rest of the UK.

Speaking after the resolution was passed by the Scottish Parliament, Deputy First Minister John Swinney said: “The income tax powers we currently have do not allow us to make income tax fairer, and I am not prepared to inflict an additional burden on the poorest taxpayers.

“Taxes should be proportionate to the ability to pay. Where we have the freedom to shape a taxation system that is fair and proportionate to the ability to pay, we have created a tax system, through the Land and Buildings Transactions Tax (LBTT) that is progressive and helps those who most need it.

“A rate of 10 pence for Scottish rate of income tax protects those on the lowest taxable incomes and ensures Scottish taxpayers are not penalised as we introduce this historic new tax regime.”

He promised to set out how the SNP proposes to use the further tax powers it would gain once the Scotland Bill is passed before the Scottish Parliament dissolves in March, subject to the agreement of a fiscal framework.