Date lodged: 31 May 2017
To ask the Scottish Government what impact a 50% top rate of income tax would have on public finances.
Answered by: Derek Mackay 7 June 2017
The Scottish Government has published detailed analysis of the impact of a 50% top rate of income tax in 2017-18 on our website. Revenue forecasts from a 50% rate of income tax are particularly dependent on behavioral effects and so a range of possible revenue impacts was provided. The First Minister has asked the Council of Economic Advisors to consider how and to what extent any revenue risk can be mitigated and we look forward to seeing their report later in the year.
HMRC have indicated that a 5p increase in the additional rate of income tax may raise around £450m in 2018-19 at the whole of UK level. An increase in income tax in the rest of the UK would impact on the Scottish budget through the block grant adjustment and Barnett consequentials depending on how increased revenues were spent.