By Kathleen Nutt

Political Correspondent

THE SNP has ramped up pressure on the Conservative Government to use this week's UK Budget to adopt new tax policies and ditch its "austerity 2.0" agenda to protect public services and the most vulnerable in society.

As well as expanding the earlier windfall tax to include all firms raking in excess profits, the party has challenged the Chancellor to introduce a new levy on share buybacks - which allows firms to funnel record profits to shareholders rather than investing back or passing on to customers or households - and to scrap non-dom tax status in order to raise billions in revenue.

In a recent report on share buybacks, the IPPR think tank warned that while households struggle, "some companies are reaping extraordinary windfall rewards and passing these to already-wealthy shareholders."

It said that if the UK government introduced a 1 per cent tax on share buybacks by FTSE-listed companies it could raise £225 million in a single year.

If "taxed at the same 25 per cent rate as the windfall tax this could raise a maximum of £11 billion a year." In the US, President Biden has already recently introduced a 1 per cent tax on share buybacks to help tackle the cost-of-living crisis.

Separately, scrapping the non-dom status - which MR Sunak's family has benefited from - could raise more than £3.2 billion each year.

The SNP's Shadow Chancellor Alison Thewliss MP said: "If the UK government actually made the right economic choices then some of the most vulnerable in society could be protected and so too could public services from swinging cuts.

"The looming threat of Austerity 2.0 is a pernicious Tory political choice - not an economic necessity. The Chancellor must abandon those dangerous plans and instead set out key tax policies that will protect struggling households and businesses.

"Following in the steps of the U.S. and taxing share buybacks - which has seen firms funnel eye-watering profits back to pockets of shareholders - and also scrapping the controversial non-dom tax status, could raise billions of pounds in revenue without hammering those already struggling to make ends meet.

"With a recession looming, rocketing prices and higher household bills, the Tory government must heed the warnings and deliver a Budget that supports people - not one that further entrenches the poverty the Tories have caused.

"However, the reality is that it's only with the full powers of independence that Scotland will be able to reject Tory austerity and build a fairer, greener and more equal society."

First Minister Nicola Sturgeon said on Friday she is "profoundly concerned" about what lies ahead in the autumn budget.

She said said the UK was in an "incredibly difficult" position after meeting Prime Minister Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt last night at the British-Irish Council summit in Blackpool.

Speaking to reporters after the summit concluded, Ms Sturgeon said "I don't know the detail obviously, of the statement the Chancellor will deliver later, next week, next Thursday, I like everybody else can read the signals, can read the runes of that.

"I don't think it will come as any surprise to hear me say, I'm profoundly concerned at what we may hear from the Chancellor on Thursday."

Mr Hunt has warned he will make "eye-watering" decisions after the economy shrank in what is predicted to be the beginning of a long recession.

This will include painful public spending cuts and tax hikes, to fill the so-called black hole of around £40 billion in the nation's finances.