Submitted by Bill Fernie
19th September 2026
For people in Caithness, the impact of the Budget cannot simply be measured by the headline percentage of a tax increase.
The reason is geography.
Living in a remote rural area brings costs that are not always faced to the same extent in larger towns and cities. Transport is the obvious example. Government research into rural poverty in Scotland found that travel is the biggest source of additional costs for rural households and can add more than £50 a week to household expenditure. People in rural Scotland are also more likely to spend heavily on fuel for their cars.
That makes fuel duty particularly important locally.
For someone living in London or another major city, reducing car use may be a realistic option. In Caithness, for many people it is much harder. Getting to work, taking children to activities, reaching the shops, attending medical appointments or travelling to Inverness can involve substantial distances.
The Scottish Affairs Committee has previously highlighted the particular pressure of fuel prices on remote rural communities, noting that people in the Highlands and Islands tend to face higher fuel prices and spend a disproportionate amount of their income on transport.
So even if the Chancellor were to make only a small change to fuel duty, the effect could be more noticeable in Caithness than the national average suggests.
VAT could also be felt quickly
VAT is another tax worth watching.
A rise in the standard rate would affect almost everybody, but it could have a particular impact on households already facing higher costs for getting around and buying goods.
Caithness is a long way from many of the country's main distribution centres. Transport costs are built into the price of goods before they reach the shop.
That means residents can face a double effect when costs rise: the price of the goods may increase while the cost of travelling to buy them remains high.
The same applies to businesses.
A local shop, café, garage, tradesman or farm business cannot simply absorb every increase in fuel, insurance, wages, business rates and other costs. Ultimately those costs have to be reflected in prices or taken out of the business's margin.
Property taxes are a different story
Changes to property taxation could have a mixed effect in Caithness.
House prices are generally much lower than in southern England, so a proposal aimed at very expensive properties may have little direct effect on most local homeowners.
But there is another side to property taxation in the Highlands.
Caithness has a mixture of ordinary family homes, farms, crofts, estates and properties used for tourism. A change to inheritance tax, agricultural reliefs or the treatment of land could therefore affect some local families and landowners even if the majority of homeowners were untouched.
This is one area where the detail of any Budget announcement will matter much more than the headline.
Pensions and savings
For older households, changes to pensions or savings taxation could be more important than income-tax changes.
Many people in Caithness have accumulated savings rather than relying entirely on earnings. A change to ISA rules, pension tax relief or the taxation of savings could therefore affect household finances even where income tax itself is unchanged.
And there is an important Scottish complication.
The Scottish Parliament sets the rates and bands for Scottish income tax on earnings and pensions, while the UK Parliament retains responsibility for the personal allowance and for savings and dividend taxation.
So Caithness taxpayers need to distinguish between what is announced at Westminster and what is decided at Holyrood.
Farmers, crofters and rural businesses
There is another particularly important local consideration.
Agriculture and crofting remain significant parts of the Highland economy. The Scottish Government's 2026–27 budget provides more than £660 million in support for Scottish farmers, crofters, land managers and rural communities.
That means changes to taxation are only part of the financial picture for many rural businesses.
A farmer or crofter may be affected by fuel costs, National Insurance, income tax, inheritance-tax rules and business costs while also relying on agricultural support schemes.
For a small farm or croft, a change that appears relatively minor when viewed across the whole UK can have a much larger effect on the household income generated from a relatively small business.
The Caithness question
This is perhaps the most useful way of looking at the Budget from Caithness.
It is not simply a question of how much tax will I pay?
It is also:
How much will it cost me to travel?
How much will my heating and electricity cost?
What will happen to the price of food and other goods?
Will the tax system make it more expensive to employ someone locally?
What will happen to farms, crofts and small businesses?
And will the government spend enough in rural areas to compensate for some of the additional costs of living in them?
These questions rarely appear in the headline Budget figures.
But for someone living in Caithness, they may be more important than whether a national tax rate moves by one percentage point.
The government's financial problems are national.
The way people experience the solutions will not necessarily be.
For households in remote rural Scotland, distance itself can be a cost.
That is why the details of the Budget will matter considerably more in Caithness than the Chancellor's headline announcements might suggest.