Finance secretary for Scotland rules out any changes to the Scottish Rate of Income Tax next year
17 Dec 2015
The finance secretary for Scotland, John Swinney, has announced in the 2016/17 Scottish draft Budget that the Scottish Rate of Income Tax (SRIT) will not increase and that the levy will remain the same as in the rest of the UK.
Under the Scotland Act 2012, from April 2016 Holyrood will receive new financial powers offering limited control over income tax rates.
The main UK rates of income tax will be reduced by 10p for Scottish taxpayers and the Scottish Parliament will levy the SRIT in its place for those living North of the border. The Scottish Parliament has the choice of whether to reduce or increase the SRIT beyond 10p, and there are no lower or upper limits.
However, on this occasion the income tax rate has been frozen at 10p in the pound. Commenting on the decision, Mr Swinney remarked: ‘The simple fact is this tax power does not enable me to target help to those on the lowest incomes’.
Other announcements made in the Scottish draft Budget include a review of the business rates system, and support for 100,000 small businesses by means of the reduction or zero rating of their business rates through the Small Business Bonus Scheme.
A new 3% charge for those purchasing second homes and landlords looking to acquire buy-to-let properties was also announced, which will be applied on top of the existing Land and Buildings Transaction Tax (LBTT) – mirroring the recent 3% surcharge on Stamp Duty Land Tax (SDLT) announced by Chancellor George Osborne in the 2015 Autumn Statement.
Mr Swinney stated: ‘In this draft Budget the Scottish Government is acting to promote our economy, deliver opportunities for all and to protect and reform our public services for the future.
‘In challenging times, it is a Budget for growth and reform. It is a Budget for Scotland and I commend it to Parliament.’