The Scottish Parliament will today formally back a radical overhaul of the tax system which will leave Scots middle-earners facing higher levies than their counterparts south of the Border.
The controversial plans mean Scots earning more than £26,000 a year will pay more income tax than workers in other parts of the UK on a similar salary.
The 2018-19 rate resolution will be backed by MSPs after a deal struck between the minority SNP government and the Greens at Holyrood – despite an 11th hour plea from the Tories last night to ditch the tax hikes.
Under the plans in Holyrood’s finance secretary Derek Mackay’s draft Budget for 2018-19, anyone with a salary of between £24,000 and £44,273 a year will see their income tax rise to 21p.
The finance secretary last night hailed the occasion as a “important day for Scotland’s future”, with SNP ministers insisting seven out of ten of taxpayers north of the Border will be better off next year under the plans.
Both the higher and top rate of income tax will be increased by 1p from 1 April, rising to 41p and 46p respectively.
But the increase in the personal allowance – the amount people can earn before they start paying income tax – together with the introduction of a 19p “starter rate” on earnings between £11,850 and £13,850 means that most Scots will pay slightly less tax in 2018-19 than in 2017-18.
The Tories claim the tax hikes could further hold back the Scottish economy which has been lagging behind the rest of the UK in recent years.
Newly published OECD figures indicate Scotland’s growth is among the lowest in the developed world.
Conservative economy spokesman Dean Lockhart said: “It is now clear that, after a decade in power, the SNP is responsible for the lowest trends in economic growth for 60 years.
“The SNP’s failure to grow our economy is directly responsible for less money being available for schools, hospitals and public services.
“The SNP’s only answer is to raise taxes despite protests from business groups who know this will simply damage the economy further.”
The Greens, who have six MSPs, have already pledged to support the Budget, allowing it to pass through the Scottish Parliament.
Labour insist that the tax rises don’t go far enough to tackle austerity and want steeper rises.
Labour finance spokesman James Kelly also hit out at the SNP, saying: “These tax changes won’t deliver the funding our public services need.”