Scotland’s higher tax rates to be kept ‘under review’, says Kate Forbes

Scotland’s higher tax rates will be kept “under review” after businesses warned they were threatening economic growth, Kate Forbes has said.

A quarterly survey for the Scottish Chambers of Commerce (SCC) found taxation and recruitment had become the leading concerns for firms north of the border, overtaking inflation.

In Scotland, there are six income tax bands, double the amount in the UK, with all workers earning over £28,867 paying more in income tax than they would if they lived in England, Wales or Northern Ireland.

A Scottish resident on a salary of £50,000 pays £1,542 more while a worker on £100,000 pays an extra £3,346 per year.

The survey found that taxation concerned 52 per cent of firms, with SCC president Stephen Leckie warning that divergence between the Scottish and UK governments had exacerbated anxieties.

Before she returned to government, Ms Forbes also expressed concern about increasing income tax rates in Scotland, warning that “continually increasing taxes” was “counterproductive” as it would constrict the tax base.

“In terms of taxation more generally, we do need to keep it under review,” Ms Forbes, the Deputy First Minister, told the BBC.

“We have seen the figures from HMRC over the last few years show that there’s still more people coming into Scotland than leaving Scotland, which is important when it comes to recruitment.

“But we said from the moment that tax was devolved that we needed to keep the behavioural impact under review because we do want to attract people to Scotland. I take the comments that the chambers have made seriously.”