Happy new tax year. With the start of 2024-25 from today, you may be paying a third less National Insurance than you faced this time last year. Or you may be paying more – a higher rate of income tax as your pay goes up, and a lot more if you earn more than £75,000 in Scotland during the new financial year.
If you own a second home in Scotland, you may be facing a doubling of your council tax bill, unless it’s in the council areas of Falkirk, Glasgow or North Ayrshire.
And if you run a business from larger premises, you’re facing an unwelcome rise in business rates. Retailers are particularly grumpy about that.
The National Insurance cut offsets the income tax rise on higher earning Scots, meaning only those earning above £112,000 face a bigger deduction from their payslip than last financial year.
But the big increase in tax is the stealthy one, of ‘fiscal drag’. A couple of years of high price inflation has resulted in high wage inflation. And as people on low earnings have moved above £12,570, they have found themselves starting to pay income tax. That starter threshold, the only bit of income tax in Scotland which is controlled by the UK government, has barely moved while wages have.
The policy last decade, of taking more and more people out of the income tax net, is being reversed, and is likely to take us back to a similar share of workers having to pay income tax. The real value of the starter threshold by 2027 will have returned to its 2013 level.