Scottish Budget Statement 2022
After the Scottish parliament session was suspended following a leak to the BBC, John Swinney finally got to make his Scottish Budget Statement more than an hour later than expected.
The main announcements were those that had already been leaked; higher earners are to pay more tax with effect form 6 April 2023. Whilst there will be no changes to the starter, basic or intermediate tax rates, the threshold for the top rate will fall to £125,140 from its current level of £150,000 – in the line with the UK Government changes introduced in the recent Autumn Statement.
The higher rate and top rate of Income Tax will increase by 1%, meaning that for anyone earning over £43,663, the higher tax rate will increase from 41% to 42% and the top rate for those now earning over £125,140 will increase from 46% to 47%. Mr Swinney said that all extra funds raised will be used for investment in the NHS.
In other news, there will be no changes to the main residential and non-residential rates and bands next year. However, anyone purchasing a second home will see a 2% increase in the Additional Dwellings Supplement from 4% to 6%, the additional charge to land and buildings transaction tax on top of the standard charge. This will come into force from 16 December 2022.
Head of EQ Taxation, David Morrison, commented, “The Scottish Government continues to position Scottish tax rates marginally above the rest of the UK. Whilst we understand the motivation for that, it will be interesting to see whether that has an impact on individuals and businesses locating themselves to Scotland.”