Income tax rises expected in Scottish budget

Scotland is expected to set its own rates of income tax for the first time today when Finance Secretary Derek Mackay unveils his draft budget to the Scottish Parliament.

Having published a discussion paper on different ways to increase the tax take for public funds earlier in the year, it is thought Mackay has favoured a modest rise for middle and higher earners.

This appeared to be confirmed when ministers voted down a Scottish Conservative motion in parliament last night which pledged to freeze income tax.

The wording of the motion was taken from a pledge in the SNP manifesto, "to freeze the basic rate of Income Tax throughout the current parliamentary session to protect those on low and middle incomes.”

Apart from a minor tweak to the top rate band last year, this would be the first time many Scottish taxpayers have paid a different rate than their counterparts elsewhere in the UK.

Mackay is expected to increase spending on services and give public sector workers a pay rise as a result.

“The 2018-19 budget will demonstrate beyond doubt where the Scottish Government’s priorities are: stopping UK cuts, protecting public services and unlocking Scotland’s economic potential," he said.

“The budget will bring forward key measures to protect public services like our NHS against the worst effects of UK budget cuts and continued Brexit uncertainty, and deliver a growth package to support the economy, unlock innovation and drive increased productivity.

"This will be a budget that is good for taxpayers, good for public services and good for business. It is a budget that will deliver for Scotland."

Scottish Conservative finance spokesperson Murdo Fraser accused Mackay of "deceiving voters" by reneging on the manifesto pledge.

“The nationalists were offered the chance to back, word for word, the promise they made to the Scottish people in 2016.

“Instead, they have disowned that pledge, and signalled their intention to punish hard workers.

“The SNP MSPs who voted this way must explain why they stood on a manifesto to cut taxes when they had no intention of seeing that through in Holyrood. They’ve misled voters, and owe them a huge apology not just for hiking their taxes, but deceiving them too.”