Fiscal Policy and Tax

Number of taxpayers subject to Scottish higher rate of tax set to top 550,000 in the next parliament

Our estimates show that if Scottish policy follows the rUK policy of freezing income tax thresholds the number of taxpayers subject to the Scottish higher rate and additional rate of tax will top 550,000 in the next parliament. If the Scottish Government chooses to increase thresholds in line with inflation, the median Scottish income taxpayer would pay around £195 less in tax in 2025/26. But the Scottish budget would be worse off in 2025/26 by over £700m.

Tax policy in the 2016 – 2021 session of the Scottish Parliament

This paper reviews the tax policy changes that have been implemented in Scotland between the 2017/18 and 2021/22 budgets. It considers the motivation for policy changes, as well as their impacts on taxpayers and government revenues.

On exempting NHS bonus payments from tax

Article / Fiscal Policy and Tax, Scottish Budget / December 1, 2020 December 1, 2020

The Scottish Government has announced that NHS and care workers will receive a one-off thankyou payment of £500 this year. Like any bonus payment, these will be taxed. But where will tax revenues go, and is there a case for exempting the bonus from tax?

Spending Review 2020 and Scotland

Article / Fiscal Policy and Tax, UK Budget / November 25, 2020 November 25, 2020

Today, Rishi Sunak set out his spending plans for the next financial year. what does this mean for spending in Scotland?

The evolution of the Scottish Budget 2020/21 – and a look forward to the Spending Review

Article / Fiscal Policy and Tax, Scottish Budget, UK Budget / November 24, 2020 November 24, 2020

The Scottish Budget has been allocated over £8bn to address the implications of Covid-19 in 2020/21. This article considers how those funds have been allocated, reviews the fiscal issues and tensions that have emerged , and considers the possible implications of the UK Government Spending Review 2020 for the Scottish BUdget in 2021/22

Should a UK wealth tax be devolved?

Article / Fiscal Policy and Tax, UK Budget / November 3, 2020 November 3, 2020

The Covid-19 crisis has renewed interest in the merits of establishing a tax on net wealth in the UK. But if a wealth tax were introduced in the UK, should it operate as a UK tax determined by the Westminster government, or would there be a case for operating the tax – or aspects of it – at a devolved level?

How progressive is the overall tax burden in Scotland?

Article / Fiscal Policy and Tax / November 2, 2020 November 2, 2020

The ONS recently published new data for Scotland on tax paid as a percentage of income by household income quantile. Unsurprisingly, some taxes are progressive (high income households pay a larger percentage of income in tax than lower income households) and others are regressive. But is the overall burden progressive or regressive?

Income tax outturn 2018/19 & implications for the budget

Article / Fiscal Policy and Tax / September 23, 2020 September 23, 2020

Income tax outturn data for 2018/19 has been published. What does it tell us about the performance of the Scottish tax base, and what does it mean for the Scottish budget in 2021/22?

Does the case for reform of wealth taxation outweigh the practical challenges?

Article / Fiscal Policy and Tax, Scottish Economy / July 13, 2020 July 13, 2020

How should a wealth tax be designed? What and who should be taxed in principle, and would this be feasible in practice? And, given the interest in devolving greater revenue responsibility to the Scottish Parliament, would a wealth tax be suitable for devolution? This article considers some of these questions.

Fiscal stimulus? Plus a note about ‘borrowing powers’…

Article / Coronavirus, Fiscal Policy and Tax, Scottish Budget, Scottish Economy / July 1, 2020 July 31, 2020

We set aside some time yesterday to look over the Prime Minister’s economy announcements, following the trail that it would set out a plan for recovery. At the heart of the announcement was a £5bn “new deal” to build homes and infrastructure. But has been widely pointed out, there was …

Fiscal stimulus? Plus a note about ‘borrowing powers’… Read More »