Sturgeon plans to freeze income tax rates

The SNP Scottish Government has said that if re-elected in May it would not to follow UK Chancellor George Osborne’s plans to increase the threshold for 40p tax payers to £45,000 next year.

Income tax rates in Scotland will be frozen, with no increases in the basic, higher or additional rate, under plans set out by First Minister Nicola Sturgeon on Tuesday.

The Scottish Government said blocking effective UK tax cuts could provide more than £1 billion for Scottish public services.

“The significant tax cuts brought about by substantial increases to the higher rate threshold proposed by the UK Government will not be passed on under today’s proposals,” said the Scottish Government.

Instead, the higher rate threshold will be frozen in real terms and increased only in line with CPI inflation in 2017/18 and by no more than inflation until 2021/22.

“That means next year the threshold for higher rate taxpayers will go from £43,000 to £43,387,” said Sturgeon.

“That increase will prevent higher rate taxpayers from receiving a real terms cut in their tax bills, but nor will they see their bills increase.

“By adopting a different path to the UK Government we could generate more than £1 billion of additional revenues, enabling us to protect the public services we all rely on.

“We believe that this proposal is reasonable, it is balanced and it is fair.”

The exact level of the higher rate threshold will be set out each year by the Scottish Government at the budget.

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