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50p Income Tax Rate “Possible” for Scotland

For high earning contractors in Scotland, a 50p income tax rate could very well be introduced, that is if Nicola Sturgeon has anything to do with it.

The Scottish politician supported a 50p tax rate for higher earners during the last general election, and is thought she will do the same this time around, with people close to Miss Sturgeon commenting that it is “under review.”

This is despite the fact that many advisors have warned her against supporting a tax rise, saying that it could lose the SNP valuable supporters come election time.

Let’s face it, if you are a contractor in Scotland who is currently earning over £150,000 a year and are paying 45% tax, the last thing you want is to be paying 50%.

Sure, you might go to your contractor accountant and see what they can do about the situation, but at the end of the day you are probably going to end up paying more…which nobody wants to do.

The 50p income tax rate proposals were initially for the whole of the UK, but it is believed that Nicola Sturgeon is in favour of it being just for Scotland if that extra income would be used within the country.

Of course, it is possible that Scotland could vote to leave the UK at some point in the future, but that is a news story for another time.

The Tories are against a higher tax rate for higher earners right now, although it is something they have talked about in the past. No doubt with the General Election coming up and the recent disaster where they tried to do a tax grab on the self employed, they are staying away from the subject of tax for the time being.

Something tells me it won’t be long until the PM and Chancellor set their sights back on high earning contractors, but right now there seems to be a truce, if maybe a rather uneasy one.

The Liberal Democrats have gone on record to say that Nicola Sturgeon and the SNP are “all over the place” when it comes to tax, something which I agree with.

My opinion is that bringing in a 50p tax rate for higher earners would actually result in revenue being lost, mainly because a lot of people would probably leave Scotland and even the UK, and go somewhere else where the tax rate was more favourable.

Not only that, but many contractors would no doubt make it their mission to legally pay as little tax as possible, which means that accountants around the UK, and particularly in Scotland, would become much in demand.

We all know how valuable a good contractor accountant can be. I think if a 50p income tax rate does come into force then they are going to become even more in demand.

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