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Scots expats warned of higher bills for tax residents
| Published: | 28 Dec at 6 PM |
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The Scottish government is to bring in a new set of tax bands likely to affect Scots expats who've retained tax-residence in the home country.
The move, expected to affect Scottish tax residents working overseas in the oil and gas industry, will be introduced in April 2018 and is certain to be bad news for many expats. From the start of the new tax year, Scotland will have five tax bands as against the norm of three at present in place in England.The new measure was announced by the Scottish National Party as part of its draft 2018-2019 budget, and is the first time a devolved UK government has raised income tax liabilities.
As a result of the change, some 45 per cent of workers in Scotland – over a million individuals – will have higher tax bills than workers earning the same amount across the border in England. In spite of a Scottish National Party promise at the last election that basic rate taxpayers would be protected, 800,000 will now be drawn into the new tax band. The decision is causing Tory displeasure, with comments suggesting the SNP could have simply cut costs, thus raising the £200 million amount the new tax rates are expected to bring in.
According to economist Arthur Laffer, there are crystal clear disadvantages to living in Scotland when its taxes are higher than in the rest of the UK. He added the SNP should understand ‘you can’t distribute more than you produce’. It’s not possible, he added, to grow the Scottish economy on low-paid jobs, especially when the country has a good number of well-paid positions. Investment, he said, is the answer, not increased taxation which doesn’t even boost the economy, with lower taxes able to increase revenues and growth for the public purse.The tax hike, he argues, will drive skilled workers and businesses out of Scotland.
The move, expected to affect Scottish tax residents working overseas in the oil and gas industry, will be introduced in April 2018 and is certain to be bad news for many expats. From the start of the new tax year, Scotland will have five tax bands as against the norm of three at present in place in England.The new measure was announced by the Scottish National Party as part of its draft 2018-2019 budget, and is the first time a devolved UK government has raised income tax liabilities.
As a result of the change, some 45 per cent of workers in Scotland – over a million individuals – will have higher tax bills than workers earning the same amount across the border in England. In spite of a Scottish National Party promise at the last election that basic rate taxpayers would be protected, 800,000 will now be drawn into the new tax band. The decision is causing Tory displeasure, with comments suggesting the SNP could have simply cut costs, thus raising the £200 million amount the new tax rates are expected to bring in.
According to economist Arthur Laffer, there are crystal clear disadvantages to living in Scotland when its taxes are higher than in the rest of the UK. He added the SNP should understand ‘you can’t distribute more than you produce’. It’s not possible, he added, to grow the Scottish economy on low-paid jobs, especially when the country has a good number of well-paid positions. Investment, he said, is the answer, not increased taxation which doesn’t even boost the economy, with lower taxes able to increase revenues and growth for the public purse.The tax hike, he argues, will drive skilled workers and businesses out of Scotland.
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