Wylie & Bisset says Scottish Budget sidesteps tax hikes to focus on funding and spending
Wylie & Bisset, the leading Glasgow-based chartered accountants, has said that Finance Secretary Kate Forbes’ first budget sidesteps tax hikes to focus on funding and spending.
Warning that Scotland’s economic growth will not return to pre-pandemic levels until 2024, Ms Forbes confirmed that Scotland had suffered an unprecedented ‘economic shock’, triggering extra borrowing powers. GDP is currently 7.1 per cent down on 2020.
Delivering the budget for 2021/22, Ms Forbes announced that there are no current plans to raise income tax rates for Scottish taxpayers. With assumed personal allowances at £12,570 for 2021/22 the main thresholds will rise with inflation providing a small amount of tax easing for some.
Personal allowances will continue to be withdrawn by £1 for every £2 earned beyond £100,000.
Alongside the income tax measures, Ms Forbes set out her plans for Land and Buildings Transaction Tax (LBTT), removing the temporary change to the nil rate threshold announced in the first lockdown. This will see the starting point for LBTT returned to £145,000 as of 1 April 2021. Relief will be retained for first time buyers.
In a bid to give Scottish households additional cash in their pockets, she said the government would incentivise those councils that choose not to raise council tax with a £90m fund accessible to those who freeze bills.
Catherine McManus, Tax Partner at Wylie & Bisset, said: “All in all it was a Budget with not much to say on tax. Clearly the focus was on funding and spending with uncertainties around access to wider UK funds.
“The tax references were largely as expected with the Scottish rates already higher than the rest of the UK. It is now a waiting game to see what the UK Budget brings on 3 March and whether that will impact the Scottish Budget thereafter.”
Wylie & Bisset urges Scottish taxpayers to seek professional advice on their tax affairs for further clarification.
For further information please contact Catherine McManus on 0141 566 7000
Issued on behalf of Wylie & Bisset by Liquorice Media tel 0141 332 4935 www.liquorice-media.com
Date: 29 Jan21