LONDON and Edinburgh have insisted that from today their tax changes are putting more money in people’s pockets.
As the new tax year began Philip Hammond, the Chancellor, pointed to tax cuts, increases to the National Living Wage and state pension as well as freezes to fuel and beer duties.
Derek Mackay, the Scottish Government’s Finance Secretary, hailed the introduction of a raft of differentiated tax changes in Scotland, which, he insisted, would make it the "fairest taxed part of the UK". Plus, the changes, he said, would raise £428 million to invest in public services.
Chancellor Philip Hammond
Including in the UK-wide changes today are:
*a rise in the tax-free personal allowance from £11,500 to £11,850, meaning a typical basic rate taxpayer will pay £1,075 less income tax in 2018/19 than in 2010/11;
*an increase in the National Living Wage by 4.4 per cent from £7.50 to £7.83, benefitting more than two million workers and
*a rise in the state pension by three per cent, resulting in a cash increase of £3.65 per week those in retirement.
READ MORE: 'SNP income tax rise will raise almost nothing as rich will dodge it'
“From today, millions of people will have more pounds in their pocket and keep more of their hard-earned wages,” declared Mr Hammond.
“By increasing the National Living Wage, cutting income tax, and freezing fuel duty for the eighth year running, we are boosting living standards for millions of people this April, giving them more choice over how to use their pay packet and building an economy that works for everyone.,” he added.
The tax changes in Scotland include:
*the higher and top rate of income tax rising to 41p and 46p respectively;
*a 19p "starter rate" on earnings between £11,850 and £13,850 and
*a new intermediate rate of 21p on income between £24,000 and £43,430.
Finance Secretary Derek McKay
The Scottish Government has stressed only those earning more than £33,000 will pay more income tax than they did in 2017/18 with seven out of 10 taxpayers not seeing any increase at all.
READ MORE: Finance secretary Mackay says tax changes will protect universal free services
It also pointed out how 55 per cent of Scottish taxpayers will pay less in income tax this year than their counterparts in other parts of the UK.
Mr Mackay explained: "The new income tax rates and bands will make the system more progressive and deliver additional revenues to invest in public services and the economy.
"This progressive approach to reforming income tax will not only protect the lowest earning taxpayers but ensure 70 per cent of Scottish taxpayers pay less tax this year than last year for a given income, while the majority of Scottish taxpayers will pay less than if they lived elsewhere in the UK.
"These measures, combined with our investment in the NHS, the economy, infrastructure, education and essential public services, ensure Scotland will be the fairest taxed part of the UK and provide the best deal for taxpayers," he added.
READ MORE: SNP and Tories join forces against Green plan to abolish council tax
But the Scottish Conservatives have stressed that with the higher and top rates of income tax rising by 1p, Scotland is now the highest taxed part of the UK and have accused the SNP of breaking an election promise after it pledged not to raise the basic rate for five years from 2016.
Labour have also criticised the Nationalists for not going far enough with tax rises, calling for the restoration of a 50p top rate for those earning £150,000 a year or more.
Holyrood was given responsibility over income tax rates and bands from 2017/18, although ministers made only minor changes to the system in Scotland last year and did not pass on an increase in the threshold for the 40p rate of taxation; an effective tax cut in the rest of the UK.
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