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Scottish income tax changes unveiled

Scottish income tax changes unveiled

Scotland's government said on Thursday it will raise taxes on higher earners and increase public sector pay, using powers to levy higher income tax rates than the rest of Britain for the first time since it was given its own parliament 20 years ago.

Despite imposing top rates 1% higher than in the rest of Britain, the Scottish government said 70% of Scottish taxpayers will not pay more than they previously did, and 55% would pay less than elsewhere in Britain.

The higher rate of tax will be increased from 40p to 41p and the top rate from 45p to 46p. But a starter rate of 19p in the pound will also be introduced.

Someone in Scotland earning £150,000 will pay £1,774 more than if they lived elsewhere in the UK, with someone earning £40,000 paying £140 more.

The budget plan offers public sector workers earning less than £30,000 a year a 3% pay rise, and those earning more than that a 2% pay rise, with a cap of £1,600 for those earning £80,000 or more.

The Scottish Government also plans to increase health funding by more than £400m - double the amount needed for NHS spending to keep pace with inflation.

The minority SNP government will need to secure the support of at least one other party in order to pass its budget, with the final vote due to be held on 19 February.

Source: UK Reuters

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