LONDON: The changes will see the introduction of a 19p “starter” rate for lower earners and a 21p “intermediate” rate. The Scottish government said it had offered to look at ways to address the tax differential of military personnel.
The Conservatives and Labour opposed the tax changes, which will come into force from the start of the new financial year in April. The UK defence secretary, Gavin Williamson, has described the new banding system as an “SNP tax hike”.
He says it unfairly hits 70% of personnel based in Scotland, leaving thousands out of pocket.Mr Williamson confirmed an “urgent review” is under way to look at how to counter what he called “the unjustified raid on pay packets”. He said: “I am working to ensure that those who are affected do not feel they are being punished by serving in Scotland.”
The Scottish government has announced that, as well as the new starter and intermediate rates, higher and additional rates will also be increased to 41p and 46p respectively.
It says those earning more than £26,000 will pay slightly more tax but the poorest – and 70% of all income taxpayers in general – will pay less.
“The new starter rate we are proposing, combined with an increase in the personal allowance, will result in 70% of all income taxpayers paying less tax than they do this year for a given wage, and 55% of Scottish income taxpayers will pay less tax than people earning the same amount and living in the rest of the UK in 2018-19.
“We are fully committed to supporting the armed forces community. Service provision varies in different parts of the UK and Scotland continues to be an attractive place to live, work and do business with access to many services not available elsewhere in the UK such as free school meals.
