New Scottish income tax band might only raise £60m

Adding a new higher-rate income tax band in Scotland might only raise £60m, a leading fiscal think tank has warned.

The Scottish government is reportedly considering introducing a new tax level in a bid to plug a gap in its budget.

The Fraser of Allander Institute (FAI) said the funding shortfall was around £1.5bn, between day-to-day spending commitments and capital projects.

But the group said adding a new 45% tax band for earnings over £75,000 would only raise around £60m for spending.

Finance Secretary Shona Robison will set out her budget proposals on Tuesday and has referred to the reports about tax rises as “speculation”.


Ms Robison has said the 2024-25 budget is being set amid some of the most difficult financial conditions in the history of devolution.

The FAI agreed in its pre-budget report that ministers face “difficult choices” in terms of what to prioritise.

The think tank said the gulf between expected income and existing spending proposals had increased to £1.5bn.


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