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Scottish Rate Of Income Tax Set At 10p UK Level
Scots will continue to pay the same rate of income tax as the rest of the UK when Holyrood gets new powers over the levy in April.
Deputy First Minister John Swinney announced the Scottish rate of income tax will be set at 10p, meaning tax rates will stay the same as they currently are.
For the first time, the budget for 2016-17 requires ministers at Holyrood to play a part in setting income tax levels, a change which has been brought in as part of the Scotland Act of 2012.
The new Scottish rate of income tax comes into effect on April 6 and will be paid by UK taxpayers who live in Scotland, regardless of where they work.
Income tax will be reduced by 10p in the pound for Scottish taxpayers but they will then have to pay a new Scottish rate.
Mr Swinney said the powers - which will be superseded in 2017 by proposals in the latest Scotland Bill - did not allow him to tailor the tax system to help lower income Scots.
He then told MSPs: "There will be no change in the income tax rate next year.
"I propose that the Scottish rate of income tax will be set at 10p in the pound. The rate people pay next year will be the same rate they paid this year.''
The land and buildings transaction tax, which replaced the stamp duty charge on property sales north of the border, will remain the same for most transactions, Mr Swinney added.
The exception to this is for buyers purchasing an additional residential property - such as a second home or a buy-to-let - worth more than £40,000, who will face an addition charge of 3% of the value.
Mr Swinney said this was £proportionate and fair'', adding the new levy ``seeks to ensure that the opportunities for first-time buyers to enter the housing market in Scotland remain as strong as they possibly can be''.
The Deputy First Minister hailed his overall budget as a "Scottish alternative to austerity''.
He criticised the UK Government and said: "By 2020 our budget will be 12.5% lower in real terms than when the Conservatives came to power.
"This is the equivalent of one pound in every eight we spend being cut by Westminster by 2020.''
With Holyrood due to get the power to set income tax rates and bands from April 2017 onwards, Mr Swinney pledged the SNP would set out its longer term intentions on income tax before the end of March, when the Parliament breaks up ahead of the Scottish elections.
Ministers will also set out plans to reform the council tax in the new year, with the Deputy First Minister saying this would be done "in a way that will delivers sustainable council finances and greater fairness for local taxpayers''.
He also said he would consult with councils about the possibility of assigning a proportion of cash raised from income tax to them "thereby giving local authorities an incentive to boost economic growth in their areas''.
Councils will receive a "strong but challenging financial settlement'' but Mr Swinney promised be substantial investment to boost social care.
He said there would be a "radical reform to the way social care is paid for'', with the Government allocating #250 million of new funding from the health service into social care in 2016-17.
Mr Swinney said: "This fundamental realignment of resources will build the capacity of community-based services and enact the most significant reform in health and care since the creation of the NHS in Scotland in 1948.
"It will mean that fewer people need to go to hospital, but it will also ensure that where hospital is necessary, people will return home more quickly.''
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