CHANCELLOR Philip Hammond was roundly praised for saying in his Autumn Statement that he will raise the income tax personal allowance from £11,000 to £12,500, meaning workers can earn an additional £1,500 before they start paying tax.

Bearing in mind that the Scottish Government will present its own Budget in December and may not follow Mr Hammond’s lead, how big a boost does such a move actually give to those deemed to be just-about managing?

Mutaz Qubbaj, chief executive of budgeting app Squirrel, said the Government is “terrified” of the impact rising inflation is going to have on people’s personal finances, meaning it views anything it can do to put a little bit of extra cash in people’s pockets as something to be welcomed.

“The Chancellor is acutely aware that rising inflation could come down on average households like a ton of bricks in the not too distant future and many of the policies announced [in the Autumn Statement] are designed to mitigate the impact on people and families who are just about managing,” Mr Qubbaj said.

“Measures such as increasing the national living wage, adjusting the universal credit taper rate, freezing fuel duty and scrapping letting fees are all focused on helping the little spare money many households have go that tiny bit further.”

However, Stephen Hay, head of tax for Scotland at consultancy firm RSM, noted that in reality it is higher-rate taxpayers - the wealthiest among us, in other words - who stand to benefit the most from the changes to income tax.

“The confirmation that the new Chancellor will stick to the plan made by his predecessor [George Osborne] to increase the personal allowance to £11,500 and the higher rate threshold to £45,000 from April 2017 will be welcome news to some taxpayers,” he said.

“He also reconfirmed the commitment to increase both thresholds to £12,500 and £50,000 respectively by the end of the Parliament.

“What this means in real terms is that an individual who meets the £12,500 threshold will take home an extra £300 on an average £25,000 salary in four years’ time and about £1,400 for anyone earning between £50,000 and £100,000, demonstrating that higher earners will benefit most.

“However, in Scotland we do not have the luxury of the higher threshold increase so there will be little to offer higher-rate taxpayers in Scotland.”

At the opposite end of the spectrum, for the many people who do not earn enough to hit the tax threshold - low earners and part-time workers in particular - the Autumn Statement brought little to be thankful for.

“For low earners, who do not pay tax, the changes do nothing and the only assistance that was offered is in the form of income or employment support allowances,” Mr Hay said.

“This is ultimately only a benefit for those who pay tax.”

Indeed, those low earners are not only going to be hit by rising inflation in the coming months but by Mr Hammond’s increase to the rate of insurance premium tax too - something higher-rate tax payers will be able to mitigate against with the changes to the tax thresholds.

The rise in insurance premium tax from 10 per cent to 12 per cent, which takes effect from June 2017 and represents the third increase since November last year, means the tax has effectively doubled in less than 18 months.

Although the Chancellor announced a crackdown on whiplash claims that should bring down the cost of motor insurance, by adding a further two percentage points to insurance premium tax he has ensured that the cost of insurance more generally is set to rise.

According to price comparison website GoCompare the change will add an extra £25.79 to the average annual motor insurance policy and an extra £18.95 to a combined building and contents policy. Those with pets, meanwhile, can expect to pay an extra £21.82 to insure against a dog’s vet bills and an additional £12.63 if they have a cat.

GoCompare insurance spokesman Matt Oliver said: “Insurance premium tax is paid as a percentage of your insurance premium so an increased rate means groups such as young drivers or older people with medical insurance are likely to be hit the hardest.

“Ultimately, these are the people who already face the highest premiums, meaning this insurance premium tax rise will be felt the most by those who can least afford it.”

As Huw Evans, director general of the Association of British Insurers, said: “Yet another increase in insurance premium tax is a hammer blow for the hard pressed.

“It will hit consumers and businesses alike, hurting those who buy business, motor, property, pet and health insurance.

“It marks a doubling of insurance premium tax since last year and to claim a consultation on whiplash reforms which hasn’t even gone before parliament yet will offset this just won’t cut it.”

While First Minister Nicola Sturgeon has already indicated that the Scottish Government will not follow Westminster’s lead when it comes to raising the upper tax threshold, SNP finance minister Derek Mackay would do well to bear all this in mind when thinking about his own Budget.

Now that Scotland has the power to alter its income tax bands will it do so for the benefit of the nation’s less well off?