New income tax rates- more squeeze on the middle

[Pammela]

Thoughts on the new tax rates?! I’m shocked at how little press it is getting and how we just accept being taxed so much more than elsewhere in the UK! We’re in a cost of living crisis and the SNP seems to think that middle earners should contribute almost half of their pay, without the national insurance relief given down south.

Most NHS workers and teachers will now be paying 42% tax bracket.

https://www.gov.scot/news/new-financial-year-heralds-income-tax-changes/

It’s worth remembering when referencing the 30 hours free childcare that Scotland has one less year of school education than in England.

30 hours childcare ( across the board) is not in place in England. That's what matters - some 2yr olds get to go here ( for free) and some receive 30 hours free there but NOT all like we have here.

Saves me a fortune and it's something I really appreciate having as my wee one is thriving at a fantastic nursery and I don't pay a penny.

Very small schools do it as there's no point in having five classes with five children in each! Surely you realise this?!

@Pammela since you’ve specifically singled out NHS workers you need to check out the equivalent pay in England v Scotland. At band 7 and 8a which could just fall into the higher tax category (don’t forget most are paying about 12% into pension which is tax free) the difference is about 3k a year. For jobs of exactly the same weighting. So they’re still hugely better off than their equivalent in England regardless of increased tax. And they got a generous covid bonus and are likely to get a higher wage increase this year.

It's only been in place for 20 months (Aberdeen less as they struggled to implement in Aug 21 came in Dec iirc) properly in Scotland hardly a look how amazing this is!

And again it's not free you don't pay at point of use but that doesn't make it free it's funded by taxes!

The 30 free hours in England seems eminently more sensible- they got it around 4 years before Scotland did, and my family would have qualified for it for at least 3 of those years.- the reason I am paying 54% on a large chunk of my income is because I work, and I'd guess the same will apply to many parents who are paying the crazy tax rate between £43k-£50k.

Up here, as its universal, rather than giving the children of SAHPs their 16 hours a week of preschool to get them prepped for school starting, scottish taxes have to cover 30 hours for kids who technically have parents around at home to look after them as well as the kids who need childcare because their parents are at work and contributing to covering the cost of the scheme- it would seem much more affordable to provide 16 hours of preschool for children with SAHPs which is a valuable thing in its own right, and restricting the longer childcare hours to working parents or children who need it for other reasons.

And as a PP has said, we also get fewer years of schooling here too, so a lot of us also have a full additional year of childcare to fund if we have kids starting at 5. Which I think is great for the kids, but just adds to it being really galling that I've paid out so many thousands of £ on childcare that I wouldn't have done south of the border, while simultaneously paying out so many thousands more in tax too over the same period.

But schools who have 5 children per class are being shut down and amalgamated to nearby primaries. Composite classes are common in many schools nowadays- not just in the highlands but in urban areas as well as towns. The main basis for all of this is maximising class size and teacher contact time to reduce spending. This isn’t education focused, rather fiscally focused.

add to this Humza’s children being in private education, I don’t think much in terms of schooling will change too much.

I think it seems sensible that the Scottish govt need to figure out how better to balance the books- giving absolutely everyone everything for ‘free’ is just madness. Concentrate on areas and people of need and allow people to feel motivated to get a promotion and earn more.

Even LBTT goes up a crazy amount incrementally. 10% between 325k-750k- the lower end of this isn’t an expensive, huge house. It’s also another middle earner tax and with house prices rising and these thresholds remaining unchanged, much like income tax thresholds (causing this fiscal drag) it just makes Scotland even less attractive if you want to attempt promotion etc.

It’s clear there are people who blindly think anything the SNP do is great though, and I’m not expecting them to agree to basically any of this. That’s part of the problem.

Is it at all possible that Humza could do a Truss??

Or am I hoping for too much?

I don't get what you're saying.

It's free until the child goes to school - if you choose to send at five it's covered, you don't pay ( unless you need extra / holiday hours).

Again, this has been great for me. Saved us a fortune as a family and my wee one is thriving in a fantastic nursery which is great preparation for school.

Also where on earth are you getting a 54 per cent tax rate from?? That's wrong.

What she is saying is all the UK had 15 hours free nursery from age 3.

About 4 years ago England introduced 30 for kids with working parents. As a money saving incentive for parents.

Scotland wanted to go better 30 hours for all. But couldn't afford it so took about 3 years later to do it.
Council nurseries are doing daft stuff like mornings going 8am-1pm and afternoon sessions 1pm-6pm. Which also makes it difficult for parents with older kids in school. LOs are up at 7.30 to get ready for school run, out to nursery at 1.00, school kid getting home at 3.00 dragged out at 6.00 for nursery pick-up. And tough getting them into bed for 7.30 for the next day.

She explained earlier 42% Higher rate tax and 12% National Insurance.

Double check the figures but it's the total of them both.

As others have pointed out, between £43k and around £50k, tax plus NI is 54% (42+12) bizarrely in Scotland, this band is more highly taxed than those earning over £50k when NI tapers off, and the total rate drops to around 44%(42+2) Its an issue with the NI thresholds aligning with the rUK tax system.

And the whole point of what I was saying is that while I was paying this really high rate of tax, I also missed out on 30 hours of free childcare time because I'm in Scotland, which was for 3 years of nursery time between 2 of my children- we'd have got the childcare funding if we lived in England, as well as only paying 32% for tax +NI (20+12) in that salary band- combined that would have made our lives much easier financially.

And because they were 5 when they started school, I paid for a full 5 years of nursery care for them (with the 15 hours helping between aged 3 and 5). In England they'd have qualified for free 30 hours age 3, and then gone to school at 4, which would have made a MASSIVE difference to us financially.

But, as I said in my first post on this thread, I think we're likely ro be caught in a band where the delay in Scotland means we've missed the 30 free hours for 2 kids, and we're also unlikely to benefit from policies like free university as that doesn't feel sustainable in the long run.

It means that all the "but the baby boxes and free prescriptions" brigade aren't really reporting the full impact- there are some areas where we get more stuff up here, but other areas where the Scottish Gov are giving us less.

@Staggie because its only been in place since August 2021 (and later for LA who struggled to roll it out). Some areas were test pilots before this but this certainly wasn't universal across Scotland.

That's a lot of parents who never benefited from it but would have benefitted in England because the 30 hrs for working parents was brought in 2017!

(And I didn't "choose to send them at 5"- they are all spring birthdays so I had no choice but to to pay for the extra year at nursery for them. I think I was really good for them to have the extra year to grow up before school started compared with their rUKcounterparts, but at £45 a day for nursery, it was an expensive extra year for us).

There's no doubt that if they had been in the "choose" boundary of winter birthdays, I'd have had to balance the financial side of it with the child's wellbeing while making that desicion, which wasn't a desirable position to put parents in either.

It’s a decent wage but it’s hardly a “high earned”.

I think it’s ridiculous, where is the incentive to better oneself and earn more if you just get hammered for tax. I wouldn’t mind if we got better public services but it just gets pissed up the wall by the SNP on legal challenges to ridiculous legislation etc.

This article on the bbc has some interesting points to make on the impact of tax rises in Scotland and Scotlands divergence from Uk set rates.

In particular it notes the impact of fiscal drag, which means that -

“For the rest of the UK, the Treasury has raised the threshold at which you start paying higher rate tax to allow for wage and price inflation, though it has now stopped doing so.
At Holyrood, that threshold was frozen at or near the £43,663 level since 2016. For the rest of the UK, higher rate income tax starts being paid at £50,270.
So someone - for instance, a teacher in a promoted post - who earns £50,000 in Scotland will be paying £1,552 more than someone on the same salary south of the Border.
And there's more. On that tranche of earnings, that teacher will also be paying 12% in National Insurance Contributions, meaning 54 pence deducted for each pound earned. That NIC rate falls to 2% at Westminster's £50,270 threshold, because it is set by the Treasury.”

This is a massive difference.
In Scotland higher rate tax starts at £43663
RUK - higher rate starts at £50270

https://www.bbc.co.uk/news/uk-scotland-65198772

Living in Scotland I am not sure where my extra tax is going. The SNP are a bloody disgrace but they have no one to challenge them so they keep on going and nobody says enough is enough. Hopefully the latest shit show with them means they will lose in the next election and someone who comes in who will either reduce taxes or preferably does something that means we can see where it is going and know that it’s making a difference. Just now it’s being pissed up the wall and whilst people might say if you earn enough to be in that bracket that’s not a reason to see the money wasted.

With all the focus on the new SNP leader, I came across this newspaper article.

https://www.spectator.co.uk/article/humza-yousaf-and-anas-sarwars-debt-to-private-schools/

I didn’t know that both the leaders of SNP and Scottish labour where privately educated.

I am an NHS employee, recently promoted to band 7, after 15 years employment. Pushed into higher rate tax bracket.

My child has dyslexia, couldn’t read or write by end of primary 4, in local state school. At child planning meeting, advised by Support for learning teacher & Ed psych that they were not expecting significant improvement during rest of primary school, but that child would get “appropriate support at their level” when going to secondary school. So final 3 years of primary, just dismissed?!
My child’s mental health was at rock bottom, they asked me “when will my teacher teach me to read?” They wanted to learn but were not appropriately supported. This was an incredibly marginalising experience, which led to bullying.

I am from a working class background, father unskilled labour, husbands father was a joiner. No history of private schooling. We have had to take the difficult and unwanted/unplanned decusion to send our child to a private school, because the state school were unable to teach them basic literacy standards.

My child can now read, do basic maths and write (although writing is poor). It’s not been a magic wand, but there is hope now.
I am hoping to move them back to state for secondary as we cannot afford the fees any longer. I do not feel we should have to pay them, the state should be providing a quality education for all children.

I feel so let down, by the SNP Scottish govt. The curriculum for excellence is a joke, my child just dropped through the massive cracks in the system.

When Sturgeon stated during her resignation speech she was proud of the SNP achievements on education, I felt so angry. That is not my experience or that of the many parents with children with a range of SEN that have left my local primary.

I believe that both the SNP & labour want to further tax private schools, making them totally out of the reach of middle earners. Yet both leaders of SNP and Scottish labour enjoyed the benefits and privileges that can come from private education. I find this totally hypocritical.

We came to parenthood late and had to cash in pensions to pay for the school fees. No doubt our retirement will be frugal!

In summary, the SNP has been a disaster for Scotland and for my family. The social contract they waffle on about, to try and justify ever increasing higher tax rates is broken. My child, like many, is unlikely to access higher education, so the incorrectly termed “free uni” is of no benefit. Why are we subsidising free uni for a small % of the population anyway?

The NHS is no better than other areas of UK. I have chronic health conditions and have observed Scottish NHS both as an employee and patient. I have also worked in English NHS.

I have no issue paying more tax than someone earning 20k but I deeply resent paying significantly higher tax than someone earning the same in RUK and gaining no benefit from it!

Posters reading this may think, check your privilege, other people are using food banks. Well that’s not right either but doesn't change the fact that our experience is that the SNP is mismanaging the very basics required from a government, which is the provision of education and health.

I hope the current scandal will shine a bright light on the SNP’s lack of financial competence.

@Edencelt as an adult with dyslexia I'm saddened and angry to read your post about your child. It's incredibly frustrating to hear children are still being written off!

My children are likely to also be dyslexic it runs in my family.

Friends have had good info and support from Dyslexia Scotland and also a lot of good materials. It was my mum who put in a lot of the hard work with me, I have 2 degrees and a professional job nothing to stop anyone with dyslexia not achieving other then people's stereotypes or refusal to adapt a way.

@scottishskifun thanks for your reply. The whole experience has taken quite a toll on us all, but obviously the greatest impact has been on my child.
We had no experience of dyslexia before our child’s diagnosis. It has been a big learning curve! I am glad to hear that with family support you have gone on to have a great career. Honestly at this point, I just want DC to believe in themselves and have good self esteem. Without that life is so much harder, whatever career path anyone takes.

18% of MSP went to private school (goodness knows how many of their children attend private school, Ash Regan’s do).

Just less than 4% of children in Scotland attend a fee paying school.

The biggest thing is them knowing they aren't stupid just that they learn in a different way. Keep encouraging them let them take regular breaks but still go back to the task in a non pressured way and speak to dyslexia charities to work out which learning method works best for your child. Once they have those skills it can be adjusted and applied. It's easy for them to just say I don't get it I can't learn etc but just adapt the style.

Also point to famous people who are dyslexic (there is a long list!) It is an additional barrier but it doesn't stop you just need to suss a different way around and find a subject he loves. My DN for instance loves and is good at physics he understands it he got a D in English and a A* in physics!

I find it an absolute disgrace that education does not assist those who need it and attempts a different path!

sorry to continue to derail the thread but:

Exactly the same experience with dyslexia in Scottish state schools here. We are extending our mortgage to go private as the state school system does absolutely nothing beyond ‘he’ll get extra time in exams’ despite the fact there are 10 years between now and exam time, and there are endless ways of helping dyslexic kids if the schools had adequate funding to train / employ people with the skills. In my experience dyslexic kids really are left to rot in Scottish state schools.

@Edencelt but your bottom of band 7 is paid almost 2k more than bottom band 7 in England, due to the Scottish parliament giving staff higher wage rises. If you’re paying into the nhs pension you also won’t be in the higher rate even after the wage increase for next year? You’re better off being in Scotland?