ICAEW chart of the week: Scottish Budget

Yesterday’s Scottish Budget was slightly overshadowed by events in Westminster, but if you live north of the border the £42.5bn that the Scottish government plans to spend next year will possibly be of more interest.

As our #ICAEWchartoftheweek shows, the largest elements of the budget are £14.3bn for health and £11.9bn for local government, followed by a total of £11.8bn spending on education, transport, justice and other, and £4.5bn on NHS and teacher pensions.

£15.3bn, or just over a third of the total, is funded by devolved taxes – with £11.7bn coming from income tax. The remainder is the block grant of £19.9bn, a share of national insurance and other UK-wide taxes of £2.3bn, £4.5bn in funding for NHS and teacher pensions, plus borrowing of £0.5bn for capital projects.

The big news was the decision to maintain the higher rate threshold at £43,430, diverging from £50,000 in other parts of the UK. A penny less of income tax on earnings up to £14,549 and a penny more on all earnings over £24,944, means that there are now 12 tax bands for employment income, compared with 9 south of the border.

This is partly because Holyrood doesn’t control national insurance in the way that it does income tax, creating extra bands where the thresholds do not line up.

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