What the mini budget means for Scotland

The chancellor Kwasi Kwarteng announced a raft of economic measures in his controversial mini budget recently but not all of them apply north of the border. So, what does the mini budget mean for Scotland?

Measures that don’t automatically apply in Scotland

Income tax
Mr Kwarteng scrapped the 45p rate of income tax for high earners and unveiled a reduction in the basic rate of tax from 20p to 19p. But Scotland’s first minister, Nicola Sturgeon, has strongly hinted that she won’t necessarily match these measures.

Before the changes were announced, high earners in Scotland were already paying 1% more (46%) on earnings over £150,000 compared to people living in other parts of the UK. Now it looks like that figure is set to increase to 6%. According to Forbes, this is likely to result in a significant number of high earners in Scotland relocating to England, leaving a sizeable hole in the Scottish budget.

Land and buildings transaction tax
It was also announced in the mini budget that people buying properties in England and Northern Ireland will no longer need to pay stamp duty on properties worth up to £250,000. The Scottish equivalent of stamp duty is land and buildings transaction tax. Currently, house buyers north of the border pay this on any property worth over £140,000. The Scottish government will set out its own decisions on tax later in the year but, as with income tax, there is no guarantee it will follow suit when it comes to land and buildings transaction tax.

Measures that apply in Scotland

National Insurance
The 1.25% rise in National Insurance for employers and employees is to be reversed throughout the UK from 6 November. According to the UK government, this equates to an average annual saving of £285 for workers in Scotland.

Corporation tax
The scrapping of the planned rise in corporation tax will also apply in Scotland – with the rate staying at 19% rather than increasing to 25%.

Self-employed tax reforms
The reversal of tax reforms for self-employed people will apply across the whole of the UK too. This means workers, as opposed to public authorities and businesses, will once again be responsible for determining their own employment status.