Humza Yousaf has claimed it is “not particularly surprising” that the SNP plunged more than £800,000 into the red in its latest set of accounts.

It was the largest deficit the party had ever recorded in a year without a parliamentary election, and its second biggest deficit ever.

The SNP’s liabilities were also around £220,000 more than its assets at the end of 2022. 

The slump in the party’s finances coincided with a loss of members and a drop in donations.

However Mr Yousaf insisted the party was “on a steady financial footing”.

He suggested the figures were normal given council elections in 2022, despite parties spending relatively little on these compared to Holyrood and Westminster polls.

He also fuelled speculation about tax rises in the Holyrood budget for 2024/25, saying there would be “difficult choices”, although UK Treasury decisions would be a factor.

Speaking on BBC Radio Scotland, Mr Yousaf was asked if the SNP was still solvent.

He said: “Yes, that [£800,000 deficit] is referring to last year's accounts and it's hardly a surprise that in an election year political parties end up in deficit.

“But you spend money to try to win elections and so therefore, as I say, not particularly surprising. 

“I think it's been well rehearsed, the circumstances within which I came to the party and some of the challenges that the party faces, there’s no doubting that.

“Many people didn't think we'd meet the auditing deadlines that we have met.

“I’m pleased we met them, and the party's finances are on a steady footing.

“We rely heavily on our almost 75,000 members that we have in the party.

“The biggest mass membership political organisation in Scotland that we are, we rely on that membership, as opposed to relying on corporate donors.

“So we're on a steady financial footing, but we'll make sure and I certainly will make sure that the party continues to be the best campaigning machine in the entire country.”

As part of the annual Programme for Government on Tuesday, Mr Yousaf hinted at tax rises in the coming budget by saying he wanted those who have most to pay most.

Finance secretary Shona Robison was also set the task of using tax powers to ensure the budget was part of the “most progressive tax system in the UK”.

That led to opposition party criticism that the SNP was planning to pick workers’ pockets with income tax increases, with Scotland the highest taxed part of the UK.

Asked if he intended to introduce a new income tax band for higher earners, as he had previously suggested, Mr Yousaf said: “The deputy First Minister, the finance secretary, has a tax advisory group made up of a number of tax experts who are sitting around that table. 

“We will of course consider progressive taxation. 

“I do believe and firmly believe that those who had the most should pay the most.

“But there's no decision that's been made on tax.”

He suggested he would also need to consider whether Scotland’s tax system diverging from that of the UK might prompt people to relocate south of the border.

He said: “We'd also have to consider what the UK Government does.

“If the UK Government cuts tax, for example, we will have to be mindful of the divergence that exists and that divergence is fine, absolutely to a point. 

“But we have to be careful around the behavioural impacts of any divergence.”

Asked for more detail on tax, he said that would be a matter for the budget.

“We'll take difficult decisions, difficult choices, we can’t do everything that everybody wants, all of the time. That is challenging, that is difficult, that is a reality of government.”

The SNP recorded back-to-back deficits for the first time since the independence referendum, ending £732,072 in the red in 2021 and £804,278 in deficit in 2022.

Membership income fell from £2,516,854 in 2021 to £2,286,944 in 2022, while reportable donations fell from £695,351 to £368,538.

The SNP’s accumulated reserves fell from £584,649 to minus £219,629.

Cash at the bank and in hand fell from £144,975 to £46,039.

Staff costs rose from £1,282,780 to £1,349,503.