SNP HIGH TAXES ARE DRIVING AWAY SCOTLAND'S TOP EARNERS
More than 1,000 higher and top earners have quit Scotland to escape the SNP’s punishing tax regime.
His Majesty’s Revenue and Customs (HMRC) said the introduction of the five-band system for income tax led to a net loss of 1,030 higher or top rate taxpayers to other parts of the UK.
The impact of the mass exodus amounts to an astonishing £60.6million in ‘lost tax’.
It is the first clear evidence that the SNP decision to make Scotland the highest taxed part of the UK has driven away top earners.
The overhaul of tax bands introduced in 2017-18 opened up a major gap between Scotland and the rest of the UK, which has grown in recent years.
While overall net migration increased since Holyrood gained control of income tax powers, the HMRC reports show more higher or top earners moved south of the Border than came to Scotland after the changes.
The Scottish Government highlighted that, in the period from 2010-11 to 2021-22, an average of almost 4,200 more taxpayers moved to Scotland than left.
Scottish Conservative finance spokesman Liz Smith said: ‘This is desperate SNP spin and cherry-picking.
‘Even in 2018-19, at the outset of the SNP hiking taxes in Scotland, higher rate taxpayers were moving to elsewhere in the UK, so that trend is bound to have accelerated as the gap has continued to widen since.
‘Rather than burying their heads in the sand and twisting the facts, SNP ministers need to act now to end Scotland’s status as the highest taxed part of the UK.’
Entrepreneur Sir Tom Hunter described Scotland’s tax system as ‘a barrier to enterprise’.
He said: ‘All employers in Scotland nowadays have to pay a “Scottish weighting” on salaries, meaning they must offer a higher gross salary both to retain and to attract the best people in order to offset the higher tax regime here.
‘We really can’t afford to lose more than 1,000 top rate and higher rate earners in Scotland.’
The HMRC report said that in the period since the end of 2017, net migration from other parts of the UK to Scotland and increased on a yearly basis, to around 8,000 individuals in the year ending 2022.
It said there has been ‘no negative trend’ in net migration since 2018-19, when the five-band tax system was introduced, but it ‘cannot draw definitive conclusions’ about whether migration levels were affected by tax.
‘For the £500,001+ band we also find a statistically significant fall in in-migration in 2018 to 2019, which is consistent with the assumption that the highest earning individuals in rUK chose not to move to Scotland to avoid the higher tax burden,’ the HMRC report stated.
It said the increases in people within lower tax bands coming to Scotland from the rest of the UK ‘are likely to be driven by factors besides the income tax changes’.
A table in the report summarising the impact on net migration of the 2018-19 changes says there was a ‘net loss in population’ of 840 among those on the higher rate, as well as 130 for those earning between £150,000 and £500,000 and 60 above this level.
This resulted in ‘lost tax’ of £11.7million for those on the higher rate, £11.1million for those on between £150,000 and £500,000, and £37.8million for the highest earners above this level.
Deputy First Minister Shona Robison said: ‘The latest figures show that across all tax bands and almost all age ranges in 2021-22, more taxpayers chose Scotland as their home than left.’
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