Tories warn against tax hikes amid claim average Scot now pays more

The Tories said that while last year’s Scottish budget ensured that anyone earning above £27,850 per year pays more income tax than someone on the same salary south of the border, recent stats show the median annual salary in Scotland is now £29,675.

Scottish Conservative shadow finance secretary Liz Smith said that on top of a “damaging and ever-widening tax gap” between Scotland and the rest of the UK further up the income scale, “even average earners are suffering under the SNP”.

Read more: High earners facing new tax hike in Holyrood's toughest budget

A spokesperson for Ms Robison stressed that Scottish taxpayers “benefit from a range of cost-of-living measures” as well as “game-changing anti-poverty measures”.

The accusation comes amid speculation that the Scottish Government is set to introduce a new tax band at next week’s budget.

On Thursday, the Scottish Government refused to deny a report in the Times that Humza Yousaf’s cabinet had agreed to introduce a sixth income tax band aimed at high earners.

Read more: Humza Yousaf under fire over 'new income tax band for high earners'

The First Minister previously expressed interest in a proposal from the STUC to create a 44p band on earnings between £75,000 and the £125,140 additional rate threshold.

Economists have warned that the Scottish Government faces a funding black hole of around £1.5 billion and next week’s Budget is likely to be one of the most challenging in the devolution era.

The £1.5 billion funding gap is identified as being in the 2024/25 financial year, made up of roughly £800 million in resource (day-to-day) spending and £700 million in capital spending.

Ms Robison has said the Chancellor’s recent autumn statement was the “worst-case scenario” for Scotland and left her little room for manoeuvre in setting the Scottish Budget.

Read more: Green ministers join Yousaf's cabinet for emergency budget meeting

The Scottish Government has insisted that Mr Swinney’s statement was accurate at the time as it referred to all income of Scottish taxpayers including employment, self-employment, pensions and property.

The Scottish Fiscal Commission will publish updated forecasts on earnings, incorporating the latest economic data, alongside the Scottish budget next week.

Scottish Conservative shadow finance secretary, Liz Smith, said: “The stats don’t lie: John Swinney’s claim a year ago that the majority of Scots pay less income tax under the SNP is simply bogus.

“The reality is the point at which workers in Scotland pay more tax than they would in England is almost £2,000 below the median annual wage.

“For years, the SNP have tried to justify the damaging and ever-widening tax gap with the rest of the UK on the grounds that those on average earnings were paying less – albeit by a miniscule amount. Now even that claim doesn’t stack up.”

She added: “To make matters worse, media reports are rife that Shona Robison is set to announce new income tax rises in next week’s budget, which would further clobber hard-working Scots.

“The SNP must heed the warnings of how damaging this would be for workers, businesses and Scotland’s competitiveness. At the same time, it would – as the Fraser of Allander Institute point out – make a negligible contribution to filling the SNP’s financial black hole.”

A spokesperson for Deputy First Minister: “After the disaster of the Liz Truss mini-budget, and the autumn statement which has prioritised tax cuts and bankers’ bonuses ahead of public services, probably the last people on earth from whom anyone would seek advice on tax policy are the Tories.

“As a result of the SNP approach to taxation, people in Scotland benefit from a range of cost-of-living measures such as free university tuition, free prescriptions, and free bus travel for both young and older people - as well as game-changing anti-poverty measures like the Scottish Child Payment.”