Scotland politics

Sturgeon: 50p income tax rate 'under review'

Nicola Sturgeon said the 50p tax rate was "under review"
Image caption Nicola Sturgeon's party supported the 50p tax rate at the 2015 general election

SNP leader Nicola Sturgeon said she was keeping "under review" the possibility of a 50p top rate of income tax.

Her party supported the move at the UK general election in 2015 but took advice that warned against introducing the 50p rate just for Scotland.

Ms Sturgeon said details of whether the SNP would again support a UK-wide 50p top rate would be in the SNP manifesto.

The Tories warned against raising the tax rate, saying it could result in revenue being lost.

Scottish Labour said the SNP had joined forces with the Tories to vote down such a proposal in the Scottish Parliament.

The Lib Dems said the SNP were "all over the place" on tax.

Image caption Murdo Fraser said raising the top rate could actually result in less revenue

The Additional Rate kicks in when taxpayers have earned £150,000 in a year. Income above that threshold is currently taxed at 45p in the pound.

The parties clashed the day after Finance Secretary Derek Mackay told MSPs that the Scottish government was still considering whether to put up tax for higher earners in Scotland from next year.

He said the government's council of economic advisers was looking at whether a 50p rate could be introduced from 2018-19.

Ms Sturgeon has faced criticism for not using new tax powers at Holyrood to implement a policy that she supported for the UK general election in 2015.

But Scotland's first minister said there were fears that it could harm the Scottish economy if higher earners sought to avoid the tax by moving their affairs within the UK.

Image caption Willie Rennie was campaigning at a scrap yard in Inverkeithing

Last year, Ms Sturgeon tasked advisers with looking at the issue on an annual basis to see whether the risk could be mitigated.

Mr Mackay said the Scottish government needed to be "sufficiently assured" that raising the additional rate from 45p to 50p would not be a risk to Scottish tax revenues.

Ms Sturgeon told BBC Scotland, while campaigning in Inverness: "We fought the Scottish election last year on a manifesto that said we would not introduce a 50p top rate tax because we had been advised that we could lose money because of the potential for tax avoidance.

"Although the Scottish government controls income tax rates we don't control the rules over tax avoidance, so we thought that was a potentially damaging thing to do.

"We also said in our manifesto we would keep it under review. We are keeping it under review but have reached no conclusions on future years' policy."

Image caption Kezia Dugdale said Nicola Sturgeon supported the policy in 2015

However, she added that in the 2015 UK election she had argued there was no issue of cross-border tax avoidance between Scotland and the rest of the UK and that was still the case.

She said the SNP manifesto would be published in due course and would outline its position.

Scottish Conservative deputy leader Murdo Fraser said: "There is a real risk that if you go down this road you end up raising less money.

"There are only 17,000 Additional Rate tax-payers in Scotland and yet they contribute something like 14% of total income tax revenues.

"It does not take very many of those individuals to decide to relocate, or reorder their affairs in order to avoid the additional tax, in order that you end up with less money as a result."

Income tax

Scottish Labour leader Kezia Dugdale said: "This desperate attempt to win back voters who are deserting the SNP for its record of failure in office won't fool anyone.

"In 2015 Nicola Sturgeon supported a 50p top rate of income tax, then joined forces with the Tories to vote down such a proposal in the Scottish parliament.

"She says one thing before an election in an attempt to sound left-wing, but acts right when she actually has to make decisions in government."

Lib Dem leader Willie Rennie said: "The SNP are all over the place on tax.

"They said before they wouldn't put income tax up for the highest earners. Now they are saying they might well do it.

"You need certainty. That is why the Liberal Democrats are very clear we want a modest penny on income tax to have a £500m investment in education and mental health.

"That's the best way, not all this footering around with the SNP. It guarantees nothing. It just adds confusion."

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