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JohnC

Scottish Budget

Well today could be an historic one when the Scottish Government give their Budget statement and potentially change the rates and bands of tax to be different from the rest of the UK.

I will watch with interest but as I have pointed out in letters to the First Minister there is a very fragile balance that needs to be maintained and when just over 10% of the population pays nearly 70% of the income tax, you don't need to lose many of that 10% to make a large hole in the 70%.

Still, who am I and what do I know?
PhilD

Re: Scottish Budget

JohnC wrote:

I will watch with interest


Always looking for a way to make your cut eh John!  
Bob Sacamano

Scotland runs the highest budget deficit in Europe now, approaching 10%.

Those 10% of taxpayers better get ready to start digging deeper.
gooner

I'm not sure what the problem is, you've got plenty of oil revenue ready to boost Holyrood's coffers.  
JohnC

As I have said before, I have two friends who make mega money. Both live in Scotland but work 3 or 4 days a week in London. The wealthier makes at least 0.5m a year and the "poorer" about half that + bonuses (which are enough to buy a new racing car, an Ariel Atom, an M3 etc etc)

The wealthier one has now bought a 2m flat in London near St Pauls which he uses when in London and if tax goes up, that will become his main residence for tax purposes and the Scottish Government will be c250,000 worse off - that is an awful lot of money to try and recoup from those that remain.

The less well off friend works for a well known Scottish company. A great deal of that company's activities at the top end of the tree are dealt with internationally and in London. There have already been some unofficial conversations about the senior staff and executive relocating south which in monetary terms will have a disproportionate impact on Scottish tax income.

You can't legislate in a vacuum when there is a border less than 100 miles away but Politicians always like to learn from their mistakes and then find someone else to blame.

EDIT. I nearly forgot I know someone else who gets paid about 300K a year working as MD of a now internationally owned company. When I last saw him, he said he didn't like the direction things were going in Scotland, politically and he was going to see if there were any other opportunities available. He is now going to USA next year to run one of their operations and they are advertising his job in Scotland at a salary about half what he was getting paid.
PhilD

Is that 10% the mega money people John or does it capture a few more "normal" earners?
JohnC

PhilD wrote:
Is that 10% the mega money people John or does it capture a few more "normal" earners?


About 14% of the taxpayers in Scotland are higher rate taxpayers which means they earn over 43,000, so plenty of "normal" people and almost every doctor, dentist, head or senior teacher, local authority management, MP etc etc. I think in the UK as a whole the percentage is about 16% or 17%.

Those earning over 150K amount to less than 1% of taxpayers but contribute nearly 1/3rd of all income tax.
Grampa

It's like the story of the ten men in the bar who share the bill according to their wealth - if the 10th man (the richest) leaves, everyone is stuffed.

I don't know if there's any truth in this statement, but it seems to me that the majority of high earners go where the jobs are rather than being wedded to a particular location because of emotional ties, so they won't give a second thought about moving for a better deal.
JohnC

Grampa wrote:
It's like the story of the ten men in the bar who share the bill according to their wealth - if the 10th man (the richest) leaves, everyone is stuffed.

I don't know if there's any truth in this statement, but it seems to me that the majority of high earners go where the jobs are rather than being wedded to a particular location because of emotional ties, so they won't give a second thought about moving for a better deal.


Both my friends are very attached to Scotland but the wealthier reckons he will be c20,000 a year worse off under the changes publicised so far, so using his London address is a no brainer. The other friend is also emotionally tied and has all his friends close by but his Mum and Dad have both now passed away so his ties are much less strong and if the rest of the 100 strong Executive decide to take their large salaries elsewhere, he would have to follow - many of them are English in any case.
JohnC

Well, I can't be too disappointed at what was handed out. Scots taxpayers will not get the increase in the basic rate tax band that English or Welsh tax payers will get but it is about 300 more tax at worst so not exactly life changing - this will increase to about 1,250 over the next few years though and will bring more people into higher rate tax over time.

Another year of relative calm then until the clowns all come out to play again next year.
PhilD

JohnC wrote:
PhilD wrote:
Is that 10% the mega money people John or does it capture a few more "normal" earners?


About 14% of the taxpayers in Scotland are higher rate taxpayers which means they earn over 43,000, so plenty of "normal" people and almost every doctor, dentist, head or senior teacher, local authority management, MP etc etc. I think in the UK as a whole the percentage is about 16% or 17%.

Those earning over 150K amount to less than 1% of taxpayers but contribute nearly 1/3rd of all income tax.


That seems a lot! Your rich mate sounds fortune if he relocate so easily, or move his money.  It would be harder for those "normal" people. I expect governments to screw those who have no choice.
JohnC

This table comes from the Government:

https://www.gov.uk/government/upl...nt_data/file/523707/Table_2.1.pdf

and this from the Guardian:

https://www.theguardian.com/news/...any-pay-top-rate-of-income-tax-uk
JohnC

The Scottish rate of Income Tax is dependant on where you live so it is reasonably easy for him to switch his residence to London especially since he works there and spends more than half his time there.

With no mention of the tax rate for those earning over 150K going up to 50%, I think my other friend will be safe in Scotland for a while but that was what they were all worrying about.

There was a comment that if they put the rate up to 50% it might lead to a reduction in total tax take so it looks as though someone has listened. Those earning 150K+ are the most mobile in society in any case and can in all likelihood live where they want and work remotely with only occasional visits.
Tim

I heard that the Scottish Tories were bleating that this budget makes Scotland the most expensive part of the UK.

Aye, sure it does, I mean when I want to relocate to London I can sell my house for 230k and buy an identical one for the same price can't I?

Arseholes.*







*This applies to the majority of politicians in my opinion.
gooner

Tim wrote:
I heard that the Scottish Tories were bleating that this budget makes Scotland the most expensive part of the UK.

Aye, sure it does, I mean when I want to relocate to London I can sell my house for 230k and buy an identical one for the same price can't I?

Arseholes.*







*This applies to the majority of politicians in my opinion.


To be honest the Scottish Tories comprises of just one person these days so I wouldn't worry too much about his opinion!
Tim

You're wrong, there's 1 Scottish based Tory at Westminster (it's full of them if you include the English based ones, such luminaries as Michael Gove & Liam Fox   ) but there are quite a few in the Scottish Parliament and the quote came from one of them.

I know I'm being picky but recent elections have shown that most people only go by one-liners so I think its justified to nit-pick misleading 'sound-bites'.

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