Scottish Budget 2020-21: Key Points

Scotland’s Minister for Public Finance and Digital Economy, Kate Forbes set out tax and spending plans for the coming year at Holyrood yesterday, following the resignation of Finance Secretary, Derek Mackay.

We have summarised the key points below.


Income Tax

  • The budget makes no changes to rates and does not introduce or remove any bands but the thresholds where the two upper rates kick in will not rise with inflation
  • The starter rate of 19% applies to the first £2,085 of income above the personal allowance
  • The Scottish basic rate of 20% will then be paid on the next £10,572 of income
  • An intermediate rate of 21% will then apply up to £43,430, with a higher rate of 41% and a top rate of 46% for those earning more than £150,000

Land and Buildings Transaction Tax (LBTT)

  • Land and Buildings Transaction Tax (LBTT) for residential property will be unchanged
  • There will be a new 2% band for non‑residential leases, applying to transactions where the net present value (NPV) of rental income over the period of the lease is above £2m

NHS and Social Care

  • Investment in health and care services will increase by more than £1bn
  • Frontline services funding for NHS boards will increase by £333m, with a further £121m increase for improving patient outcomes
  • There will be an investment of £117 million in mental health for all ages and stages of life
  • Additional support for social care goes up from £120m to £220m
  • The total Scottish health portfolio budget will be just over £15bn for the first time

Environment and Climate Change

  • There will be £1.8bn of investment in low emission infrastructure, including a package of over £500m of investment specifically designed to increase efforts to respond to the global climate emergency;
  • A total of £461.8m will be spent on the environment, climate change and land reform – an increase from £426.6m
  • Marine priorities include to safeguard and monitor marine and fisheries activity in Scotland’s seas, coasts, rivers and ports – with spending increasing to £65.5m

Childcare and Education

  • The budget will invest around £645m in the expansion of early learning and childcare
  • There will be funding to establish the ‘game‑changing’ Scottish Child Payment which, when fully rolled out in 2022, will help an estimated 30,000 children out of poverty
  • There will be an investment of more than £180 million in raising attainment in schools, including £120m delivered to headteachers to spend on closing the attainment gap

Business and Economy

  • The Scottish National Investment Bank to be operational in 2020, supported by the £150m Building Scotland Fund and a further £220m indirect investment in 2020-21
  • Research and development spending will continue to increase towards the 2025 target of £1.7bn, doubling spending over a 10-year period

Communities and Local Government

  • The Affordable Housing Supply Programme spending will increase to £843m
  • Spending on measures to reduce fuel poverty and improve energy efficiency will increase from £119.6m to £137.1m
  • The Scottish Child Payment which will be introduced paying £10 per week, per child every four weeks to eligible families with children under six

Transport, Infrastructure and Connectivity

  • Spending on rail services will go up from £989m to £1,259.1m
  • Investment in concessionary fares and bus services will be increased by £16m, taking the total investment in 2020‑21 to nearly £290m
  • Motorways and trunk road spending will fall from £833.1m to £748.9m
  • There will be an increased investment of £5.5 million in active travel

Justice

  • There will be an increase in the police budget from £1,180.1m to £1,222.3m
  • Spending on the fire service will increase from £327.2m to £333.3m
  • There will also be £6.5m of additional investment in support for community justice, to reduce re-offending

Please note that these proposals are due before Parliament in March 2020 for a vote. If an agreement cannot be reached these proposals may change.

If you have any queries, please speak with your MHA Henderson Loggie contact or email info@hlca.co.uk


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