The greater income tax burden for higher earners in Scotland relative to the rest of the UK will be kept “under review”, taking into account “how easy it is for taxpayers to shift”, Deputy First Minister Kate Forbes has declared.

However, Ms Forbes flagged figures from HM Revenue & Customs showing more people had come to Scotland from the rest of the UK than had moved in the opposite direction, against the backdrop of devolved income tax. And she highlighted the part “progressive” taxation played in funding the £26.70-a-week Scottish child payment for lower-income households north of the Border amid UK austerity.

Asked in an exclusive interview with The Herald if she thinks there has been too great a divergence in the income tax burden for higher earners in Scotland compared with those elsewhere in the UK as things stand, Ms Forbes replied: “No but I think we keep it under review.

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“I was…public finance minister when income tax was first devolved and I recall at the time us making it clear that we would follow the Adam Smith principles of taxation and one of the commitments that we made was to always keep the divergence under review to understand the behavioural impact because I want to be independent but we are devolved and that has implications for how easy it is for taxpayers to shift.”

However, Ms Forbes added: “What we have seen is despite the constant negative reaction from the opposition parties, HMRC concluding that just over 4000 more people have come to Scotland than have left. I think that speaks to the fact that people choose to immigrate to Scotland for a whole host of reasons and it’s very reductionist to assume people purely make decisions on income tax. They will also take into account, for example, council tax, they will take into account the cost of living and on that we really do excel in Scotland with the reduced cost of prescriptions, tuition fees and basically I think a better work-life balance.”

Ms Forbes, who is also Cabinet Secretary for the Economy and Gaelic, acknowledged that “clearly those HMRC figures relate to previous years because we will only know the impact of this year in 18 months”.

The differential between the tax burden on higher earners in Scotland and the rest of the UK was increased further in the Scottish Budget in December, for the current 2024/25 tax year. This move prompted warnings from some quarters that some taxpayers would move away from Scotland as a result of the greater burden north of the Border.

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Ms Forbes confirmed her comments on income tax related to both rates and thresholds.

And she declared: “Clearly all of it has added substantially to the amount of funding that Scotland has available to spend on public services. Of that there is no doubt. It is still an increase in funding and I think our whole debate around taxation has got to be understood in the context of austerity - the fact that ultimately we want to protect our public services from austerity and that requires choices around taxation.”

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Meanwhile, referring to the scope of devolved tax powers in Scotland, Ms Forbes said: “The fact that only rates and bands have been devolved, any tax expert will tell you, is ridiculous because tax has got to be seen as a toolbox and how income tax relates to other taxes but also how income tax particularly relates to national insurance contributions and allowances and things like gift aid. We can’t pull all those levers – we are just left with one pretty blunt lever in terms of rates and bands.”