Scotland contributes £14.2bn more tax to the UK economy – Scottish Business News

THE latest analysis by finance experts, RIFT, has revealed that Scotland’s annual tax contributions to the UK have increased by £14.2bn over the last decade, with income tax, capital gains tax and taxes on productions such as environmental levies driving this increased contribution.

However, while the Scottish people and Scottish businesses are contributing more almost across the board, government-backed public corporations have seen a reduction in the level of tax contributed to the economy. 

RIFT analysed the latest figures from the ONS on the revenue generated by public sector finances across Scotland and how these contributions have changed over the last 10 years. 

Scotland contributing £14.2bn more to the UK economy

The analysis shows that the Scottish public sector generated an annual revenue of £73.3bn during the last financial year*, a 24% increase versus a decade ago, equating to an increased contribution of £14.2bn to the UK economy. 

As a result, Scotland now accounts for 8% of total UK contributions, far more than the 3.5% contributed by Wales and the 2.1% contributed by Northern Ireland. 

Taxes on income and wealth – +40%

Tax increases on income and wealth have largely helped drive this growth, with total receipts increasing by 40% in the last 10 years. 

Both income tax (+71%) and capital gains tax (+70%) have seen the largest increase of all taxes on income and wealth over the last decade, with corporation tax excluding North Sea Oil also up 17%. 

In fact, of all taxes on income and wealth, just public corporation contributions have seen a decline (-30%). Public corporations are the UK’s form of organisations for nationalised industry that operate in the public interest using capital provided by the government and cover areas of society such as health, transport, defence and communities and local government.  

Taxes on productions – +35%

Taxes on productions have also climbed by 35%, with taxes on environmental levies driving this increase, up 368% in the last decade. Taxes on land and building transactions have increased by 197%, with taxes from EU Emissions Trading Scheme auction receipts seeing the third largest increase at 190%. 

Other current taxes – +34%

Contributions from other current taxes have also seen significant growth in the last 10 years having increased by 34%. This growth has come from a 57% increase in visa fees, a 39% hike in council tax, as well as a 22% increase in TV licence fees. 

Bradley Post, MD of RIFT, commented:

“Scotland’s economic contribution to the UK stretches far beyond North Sea Oil and, in fact, there has been significant increases across many areas of the Scottish economy in the last decade. 

So while the topic of Scottish independence may be a contentious one, there are over fourteen billion reasons why the UK should be happy that Scotland remains a part of it today.”

Data tables