The Scottish Conservatives have today put forward a bold new “common sense” plan with proposals to reduce income tax, business rates and LBTT.
The fully costed tax plan is the party’s submission for the Scottish Budget after the SNP requested proposals from all opposition parties.
Leader Russell Findlay has written to John Swinney to put forward the alternative approach which would “start to undo the damage of SNP tax rises” by reducing income tax, business rates and LBTT on homebuyers.
Findlay said it was “unlikely” the SNP would agree to the plan because John Swinney would likely choose the “extremist Greens” over “economic growth.”
He also noted the SNP and the Scottish Conservatives had vastly different spending priorities, including the rapidly rising bill for social security benefits and sending money overseas when budgets are tight in Scotland.
Findlay said the tax cuts could be paid for using some of the extra £3.4 billion from the UK Government and savings which the party will outline after the SNP “open the books” when they publish the budget on December 4.
The Scottish Conservative tax plan would see income tax reduced by £222 for the average earner, as the 19p rate would apply up to £43,662.
It would mean that everyone earning less than £45,000 – which includes approximately 85 per cent of Scottish taxpayers – would pay less tax than if they lived in the rest of the UK.
The party are also proposing 100 per cent rates relief for pubs and restaurants next year, meaning they would pay no business rates at all, alongside 40 per cent rates relief for Scottish retail, hospitality and leisure businesses.
The proposals would also see LBTT reduced to zero per cent on all residential properties up to £250,000 which would save the average house buyer approximately £800.
Finance spokesman Craig Hoy has also written to his counterpart Shona Robison with further details of the party’s common sense tax plan.
Scottish Conservative leader Russell Findlay said: “Our common sense tax plan would cut bills for workers, businesses and would-be homeowners.
“We would start to undo the damage of SNP tax rises by reducing income tax, business rates and LBTT.
“The SNP, Labour and other left-wing parties in the Scottish Parliament are unlikely to support it because they seem to think they can keep taking so much of taxpayers’ money while giving so little in return.
“Our common sense plan is an alternative approach to what Holyrood usually comes up with.
“This plan is bold and ambitious.
“It would provide families and businesses with more freedom and control over the money they work so hard to earn.
“We believe it will be backed by aspirational workers and businesses across Scotland, even if it’s not supported by the SNP.”
Scottish Conservative shadow cabinet secretary for finance, Craig Hoy, said: “We see this plan as the starting point of a process to reduce taxes to the same level as the rest of the United Kingdom, potentially even lower.
“Our common sense plan is very different to the SNP’s approach. It would encourage aspiration and provide a fair reward for hard work.
“The SNP can afford to cut taxes with the extra money they have from the UK Government, combined with sensible savings they could make from more efficient and effective spending.
“Once the SNP open the books and we see the full state of public finances, we will set out how we would save the taxpayers’ money so that our common sense plan is 100 per cent affordable and responsible.”
Notes
The letter from Russell Findlay to John Swinney is attached.
Full details and costings are below:
Cut income tax to 19% up to £43,662
- This will save a taxpayer earning £35k a year £286, with a maximum saving of up to £459.
- Currently those earning between £14.8k and £26.6k pay 20% income tax, while those earning between £26.6k and £43.7k pay 21% income tax.
- Our proposals mean that every taxpayer earning less than £45k pays less tax in the UK (approximately 85% of Scottish taxpayers)
- Under the SNP, anyone earning more than £28.8k pays more tax in Scotland (approximately 50% of Scottish taxpayers)
- Our income tax cut would cost approximately £583 million.
- The SNP Government have raised income tax by nearly £1.5 billion since its devolution.
Pass on 40% business rates relief to Scottish retail, hospitality and leisure businesses.
- This would replicate the proposal funded by the UK Government for businesses in England.
- The Fraser of Allander Institute estimates this would cost £220 million in Scotland.
- The SNP Government have failed to pass on the full business rates relief from the Conservative UK Government for three years running.
Provide full business rates relief for Scotland’s pubs and restaurants.
- This would mean every pub and restaurant in Scotland would pay no rates this year.
- 3,430 pubs would benefit with an average saving of £15,405
- 3,299 restaurants would benefit with an average saving of £20,028
- This proposal would cost between approximately £72-£119 million depend on overlap with other reliefs.
Cut Land and Business Transaction Tax to 0% for residential properties worth up to £250k.
- This would raise the current zero rate threshold from the existing £145,000
- Up to 59,000 house buyers will benefit from this tax cut.
- This will save an average house buyer £800
- This move will cost £62 million.
The total cost of our proposals is approximately £936-£984 million.
The SNP’s income tax rises alone take £1.5 billion from Scottish taxpayers compared to what they would pay in the rest of the UK.