Scottish budget risks and uncertainties – implications of Covid-19

The Scottish Budget 2020/21 was published and agreed before Covid-19 was perceived as posing a significant health risk to the UK. This post examines how the policy response to Covid-19 will affect the size of the Scottish budget, the outlook for devolved revenues, and the financial risks the budget is …

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Household finances in Scotland – now and in the future

New summary statistics have been released today on household income for the UK, including Scotland, covering the period up to the 2018/19 financial year. These figures belong to the pre-COVID-19 world but should not be dismissed as irrelevant. They provide a picture of the underlying health of household finances going …

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Impact of SG tax changes on household incomes

The Scottish Government says that income tax policy changes since 2016/17 have been ‘highly redistributive’ and have ‘protected low income earners’. But how much of this affect can be attributed to the Scottish Government’s rates and band changes, and how much to the UK Government’s Personal Allowance changes? And how …

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Budget 2020/21 – key issues to watch for

On Thursday, Mr Mackay will present his fourth budget – the penultimate budget before next year’s elections. The budget will be delivered against the backdrop of the UK’s recent departure from the EU, significant frictions between both governments on issues ranging from constitutional change to budget timing, devolution of major …

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Devolving income tax revenues to local authorities – some analysis of distributional implications

Frantisek Brocek and David Eiser Should local authorities’ revenue sources include a locally set income tax? Or, alternatively, a proportion of the income tax revenues that are raised from its own residents? This question has been pondered repeatedly – although with varying degrees of seriousness – over the past 15 …

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Analysis of Jackson Carlaw’s income tax proposals

Earlier this week, Scottish Conservatives leadership candidate Jackson Carlaw committed to close the income tax gap between Scotland and rUK for those earning between £27,000 and £45,000. The majority of individuals with income in this range (those with incomes less than £43,430) currently face annual income tax liabilities of up …

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FAI Commentary: The outlook for the Scottish Budget 2020/21

This blog post contains the policy context chapter of our economic commentary, published today. The latest economic commentary can be found here. Budget 2020/21 will be the fourth of five to be set in this parliament. Normally of course it would have been published by now – the Scottish Government …

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Has the Scottish Government received a £700m ‘bail-out’ from the UK Government?

Last week, we had the first set of income tax reconciliations for Scotland’s new fiscal framework. For the coming year, that reconciliation figure will be around £200m. In the aftermath of the publication of these figures, there were reports that Scotland was also in receipt of a £700m ‘bail-out’ from …

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Today’s Income Tax Reconciliations from HMRC: confirmed £200m shortfall in funding to hit next year

Today, HMRC published the first ever figures on the scale of ‘income tax reconciliations’ for Scotland. These ‘reconciliations’ – whilst being a largely dry technical issue – are a key part of Scotland’s new fiscal framework. These income tax reconciliations are reflections of the fact that Scottish budgets are initially …

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