A Budget deal between Nicola Sturgeon’s SNP government and the hard-Left Greens could cost Scotland’s higher rate taxpayers a further £250 each, it has emerged.
The Greens, who are seen as the most likely opposition party to do a deal with the minority SNP administration, said they could not currently support the Scottish Budget as it cuts local council funding.
Andy Wightman, the party’s local government spokesman, said he wanted ministers to provide a further £150 million and suggested there could be discussions around income tax “bands and thresholds” to find the extra money.
Derek Mackay, the SNP Finance Minister, admitted there was an “anomaly” with his tax plans, with people earning between £43,525 and £58,500 getting a tax cut next year.
This is because he used his 2018/19 draft Budget, unveiled on Thursday, to increase the salary threshold for the 40p tax rate by inflation to £44,273. Mr Mackay confirmed he would “engage” with the other parties over the issue.
But freezing the threshold at the current level of £43,000 would mean the vast majority of higher earners paying an extra £254 income tax compared to the minister’s original plans.
This would be on top of increases already announced by Mr Mackay, who used his Budget to put a penny on both the higher and top rates, increasing them to 41p and 46p respectively.
He also unveiled an extra 21 per cent income tax band for earnings between £24,000 and £44,000 that will sit between the basic and higher rates. Overall, 750,000 Scots earning more than £33,000 will see their taxes rise.
The changes also mean will mean 45 per cent of Scottish workers – around 1.1 million people – will pay more income tax than if they earned the same salary in England. The total includes 800,000 basic rate taxpayers whom the SNP promised to protect in last year’s Holyrood election.