Scotland’s leading entrepreneurs have pinpointed higher taxes as a potential barrier to recruitment and business growth, after the Chartered Institute of Taxation warned high earners in Scotland could face an effective 68% tax rate, if First Minister Humza Yousaf goes ahead with a new charge.
Speaking on the Go Radio Business Show, Sir Tom Hunter said: “The attraction and retention of talent is the number one thing a business leader has to do. So what does Scotland need to do to attract and retain talent?”
Lord Willie Haughey replied: “The one thing we certainly don’t have to do is hike the top rate of tax. Only 33,000 people in Scotland are in that top bracket. So where is the maths and ideology behind this ‘good idea’. It will be a disaster.
“Here’s a message to Humza Yousaf: ‘Whoever is advising you on this, you will never attract talent to Scotland’.”
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Sir Tom noted: “There are 1.8 million people in Scotland who don’t pay any tax. There are 1.1 million people who pay the basic rate of tax. Then there are only 33,000 people paying the top rate. So I would say to our First Minister, it’s about the tax take, not the tax rate.”
Lord Haughey believed the number one priority should be to get 50,000 of the 1.8 million who are currently inactive into work.
“That will help 10 times more than raising the highest tax,” he said. “ So all the things we've been told about in the past few weeks – the whole green agenda, the big opportunities for Scotland in tackling the housing crisis – put all that together and I'll guarantee there are 50,000 meaningful jobs there. That’s what we should be focusing on. It is bonkers to think a higher tax bracket is the solution.”
Sir Tom concluded: “We want people to come here, create jobs, pay their tax, and that’s how the world goes round. A higher tax is going to put people off coming here and it’s going to put off the talent businesses need. So, First Minister, listen, learn and help Scotland!”
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