Tax cut for lower earners in Scotland as richest set to pay more for homes

The Scottish Government has announced a tax cut for lower earners as those with houses worth £1 million are set to pay more in council tax.

Addressing MSPs on Tuesday, Finance Secretary Shona Robison laid out her Government’s tax and spending plans.

Under the new proposals, most tax brackets will be frozen, while the basic and intermediate rates will increase by 7.4%, pushing some into lower tax brackets and keeping others from paying more.

The basic threshold will increase to £16,537, while the intermediate will go to £29,526.

The increase to those bands will cost the Government £50 million in the coming financial year, according to the Scottish Fiscal Commission, while the decision to continue the freeze for other bands up to 2028-29 will see a £200 million boost in that year.

The increase to the rates means the Scottish Government can continue to claim that the majority of Scots pay less tax than they would elsewhere in the UK, a claim which has been debunked by experts in recent years.

Speaking in Holyrood, Ms Robison said: “That is an increase in these thresholds of almost 11% in two years and, as a result, even more people in Scotland can expect to pay less tax than if they lived in England, Northern Ireland or Wales.

“That is over 55% of Scots set to pay less income tax because they live in Scotland and have a Government led by the SNP.”

Elsewhere, the Finance Secretary also appeared to accept Scottish Green calls for a so-called mansion tax, announcing two new council tax bands to be paid by those whose homes are worth £1 million or more.

The changes will be in place by April 2028, Ms Robison said, adding: “That measure will bring greater fairness as well as increased revenues to councils.”

A private jet tax will also be mulled over in the coming years, Ms Robison saying those who use the aircraft will “pay and pay a fair share for that privilege”.

On council tax, the Finance Secretary claimed funding for local government was increasing by 2% in real terms, as she urged councils against large increases in levies.

“Decisions on council tax rates will, of course, be taken locally, however, this is a reasonable deal and given the cost-of-living pressures that we all recognise, I urge local authorities to translate the settlement into reasonable decisions on council tax,” she said.