NICOLA Sturgeon is highly unlikely to raise the top rate of income tax again in this parliament, advice from her economic advisers has suggested.
The First Minister raised the rate for those earning over £150,000 from 45p to 46p in this year’s budget.
However newly released minutes of a meeting of the First Minister’s Council of Economic Advisers suggest any raise above 46p is unlikely before the next Holyrood election.
They said there would not be any detailed data on the effect of the 1p rise until May 2021, and also warned Scotland has fewer top-rate taxpayers than previously thought.
The advice was given to the government in August ahead of the Scottish budget, which is published in draft on December 12.
Labour have called for a 50p top rate, but research suggests this could prompt many people to avoid it, principally through legal avoidance, illegal evasion, or leaving the country.
While in theory it could raise an extra £145m, in practice it could be £53m at best, or at worst £24m less than at present.
For their August meeting, the Council of Economic Advisers were given updated government research.
They concluded there continued to be a “behavioural driven revenue risk” if the top rate “were to diverge significantly from the rest of the UK”.
In addition, new data suggested the number of top rate taxpayers fell from 14,600 in 2015-16 in Scotland to 13,300 in 2016-17, a decline not seen elsewhere in the UK.
The Council said it was waiting with interest to see when the first confirmed revenue data would be available to allow them to judge how people reacted to this year’s 1p rise.
“However, since income tax data is only available with a significant lag, there will be no opportunity to formally assess Scottish top earners’ behaviour until May 2021 when detailed micro data from the Survey of Personal Incomes will be made available," they said.
“In addition, HMRC will publish outturn receipts for 2018-19 in summer 2020, providing a first indication of how Scotland’s income tax policy performed.”
Meanwhile a new Ipsos Mori survey for Deloitte suggests Scots are the most willing in the UK to support higher taxes to pay for public services, and the most worried about cuts.
It found 73% of Scot backing increased taxes for higher public spending, compared to 61% in Northern Ireland, 69% in England and 70% in Wales.
In addition, 85% of Scots were concerned about the future provision of public services - 15% more than the UK average.
The poll, produced with thinktank Reform, covered 1,463 adults in the UK, 123 in Scotland.
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