More Scots are being dragged into higher tax bands and being used by SNP ministers to pay for a “ballooning” welfare bill, say Scottish Conservatives.
The number paying higher rate income tax is now two and a half times greater than when Holyrood began setting rates and bands.
According to the Scottish Fiscal Commission 788,000 workers will be in the higher rate bands in the next financial year if John Swinney’s government once again freezes the threshold in Tuesday’s budget.
That compares to just 318,300 in 2017-18, when the SNP took charge of the thresholds.
Due to SNP freezes, the threshold for paying the higher rate has barely moved (from £43,430 in 2017-18 to £43,663 in the current tax year).
Had the threshold moved in line with rising salaries, only those earning more than £58,500 would now be higher rate taxpayers.
The Scottish Conservatives described the freeze as a “brutal and deepening stealth tax” on middle-income Scots who, they say, are being dragged into higher bands to pay for the SNP’s welfare bill.
Shadow Finance Secretary Craig Hoy is calling for the thresholds at which workers start paying income tax – and then pay the higher rate – to be increased in line with inflation in the budget, along with a cut in the basic rate to 19%.
“These figures highlight how the SNP are using middle-income Scots as a cash cow to fund the ballooning benefits bill,” he said.
“This isn’t those with the broadest shoulders, as the SNP try to pretend. John Swinney’s government are clobbering nurses, teachers and police officers – and it has to stop.
“Scots households are struggling to cope with rising bills from two high-tax, left-wing governments, and are crying out for help.
“Scottish Conservatives are committed to giving workers and businesses a break by reining in Scotland’s unaffordable welfare bill.”
Currently, everyone earning more than £30,300 pays more income tax in Scotland than they would in other parts of the UK.
The Scottish government argues that its tax regime is fair and progressive and that workers benefit from a range of benefits not available in the rest of the UK.
Social Justice Secretary Shirley-Anne Somerville yesterday said there will need to be ‘tough choices’ in tomorrow’s Budget but defended the current approach to income tax.
She repeated claims that a majority of taxpayers are projected to pay less income tax in Scotland this year than they would in other parts of the UK – despite the Scottish Fiscal Commission finding that this was not the case in the last two financial years, when a majority paid more than they would south of the Border.
There is some speculation that an “anomaly” affecting middle earners will be corrected in the budget.
A Scottish Government spokesman said: ‘The Scottish Government’s tax decisions enable us to deliver higher investment in the NHS and policies like free tuition not available anywhere else in the UK, while ensuring the majority of taxpayers are expected to pay less income tax than elsewhere in the UK.
“Tax policy for 2026/27 will be announced at the Scottish Budget.”
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