Robin Holyrood: Giving To The Poor

11th February 2023

A diverging income tax system means higher earners in Scotland will pay a lot more than they would in England, while Scottish welfare benefits get more generous.

The Institute of Fiscal Studies says the poorest households will be £580 better off than they would be in England, and the highest earners, on average, £2590 worse off.

However, such changes come at a cost - to other public services, and in Scotland's attractiveness to high earners.
The average Scottish household will be £210 worse off next year than it would be on similar income in England.

That's after accounting for different Scottish rates of income tax and different levels of benefits.

For the average household, it's not a huge difference. And it helps to pay for those extra benefits from living in Scotland: university tuition fees paid by the Scottish government, more generous social care, free bus travel for younger and older folk, NHS prescriptions and eye tests, and so on.

While the average tax impact is modest, it's at the margins that you can see something more significant going on. The highest earners are paying quite a lot more in tax. The lowest income households are doing better from benefits, particularly those with children.

Read the full BBC article by Douglas Fraser HERE