Scotland plans to increase taxes for individuals with higher incomes, aiming to safeguard essential public services.

A new tax band has been introduced for individuals earning over £75,000, with the top rate for salaries over £125,140 increased to 48p.

In an effort to reduce cuts to public services and fund a council tax freeze, higher earners in Scotland will be subject to heavier taxation.

The finance secretary of Scotland, Shona Robison, announced the implementation of an “advanced” 45p tax band for all those earning above £75,000, with the top rate of income tax increasing to 48p for individuals earning above £125,140.

Robison stated that these tax increases, along with freezing the tax thresholds for intermediate and higher rates, would magnify the effects of an unexpected rise in revenues projected for next year.

Overall, Scotland’s higher taxes on wealthier individuals are estimated to raise an additional £1.5bn compared to mimicking rates in the rest of the UK.

This would enable slight tax cuts for lower earners by inflating the threshold on starter and basic rates alongside increased spending on social welfare and homelessness.

Robison defended the tax increases against criticism, asserting that they would help offset the impact of funding cuts to Scotland’s block grant from the UK government.

The Scottish Fiscal Commission confirmed that the tax changes would contribute to a £1.3bn budget increase, equivalent to a 2.6% rise in cash terms.

While Labour accused Robison of failing to acknowledge significant cuts in various areas, the council tax freeze was criticized for benefiting wealthier individuals and limiting resources for public services.

The overall impact of income tax rises is also expected to be reduced by national insurance rate cuts implemented by the Treasury.

The Chartered Institute of Taxation highlighted that Scottish taxpayers earning £100,000 would pay £3,346 more in income tax compared to their UK counterparts due to cumulative tax changes introduced by the Scottish government since 2017.

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