Scottish Budget 2018: Winners and Losers
Against a backdrop of Brexit uncertainty, Derek Mackay, Finance Secretary of Scotland, delivered his draft budget.
It’s perhaps unsurprising that Brexit and the potential effects featured heavily in the Budget speech, with the Finance Secretary declaring that ‘any kind of Brexit will make us poorer. He then added: “This Budget delivers for the Scotland of today, and invests for the Scotland of tomorrow.”
In what was a relatively quiet Budget for personal finance, will you be better or worse off?
Building on the Income Tax changes that were made during February’s Budget, tax rates will remain the same for 2019/20. The starter and basic rate bands will increase in line with inflation, maintaining spending power.
Public sector workers
Many public sector workers will benefit from a pay rise, following years of a 1% pay cap. For 2019/20, public sector employees earning £36,500 or less, a pay policy with a 3% rise will be welcomed. For public sector workers earning between £36,500 and £80,000, the pay increases will be capped at 2%, while those earning more than £80,000 will be capped at 1%.
Whilst business rates will be increasing by 2.1%, it is below inflation, cushioning the blow somewhat. The very positive news for some, however, is that the Small Business Bonus Scheme which provides business rate relief is being maintained through the next financial year.
Where low earners benefit from Income Tax changes, the higher rate threshold has been frozen at £44,274. This is unlike in the rest of the UK, where it will increase to £50,000 in April 2019. The move aims to raise an extra £68 million revenue.
Council tax payers
Those responsible for paying council tax could see their bill increase in the new financial year. Local authorities will be allowed to increase council tax levels by a maximum of 3%.
Second home and Buy to Let
Those looking at buying a second home or investing in a buy to let property will face a higher Land and Buildings Transaction Tax. The tax will increase by 1%, taking it to 4%.
Do you want to discuss how you’ve been affected by the Budget? If you have any questions or just want to get an understanding of what the changes mean for you, please get in touch with us.