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Tories warn firms may leave Scotland in tax debate Tories warn firms may leave Scotland in tax debate
(about 17 hours later)
Companies forced to pay higher wages could be pushed out of Scotland, the Scottish Conservatives have warned.Companies forced to pay higher wages could be pushed out of Scotland, the Scottish Conservatives have warned.
The Tories are set to lead a Holyrood debate on tax, and are unhappy with SNP plans not to implement a UK government tax cut for high earners. The Tories are leading a Holyrood debate on tax, and are unhappy with SNP plans not to implement a UK government tax cut for high earners.
The party says this will force firms to top up salaries to keep highly skilled staff, warning that some may move elsewhere in order to avoid this.The party says this will force firms to top up salaries to keep highly skilled staff, warning that some may move elsewhere in order to avoid this.
The Scottish government said its tax plans were "fair and progressive".The Scottish government said its tax plans were "fair and progressive".
Finance Secretary Derek Mackay, who will set out his first draft budget on Thursday, said tax powers had been devolved to Holyrood to "allow Scotland to make its own decisions".Finance Secretary Derek Mackay, who will set out his first draft budget on Thursday, said tax powers had been devolved to Holyrood to "allow Scotland to make its own decisions".
Mr Mackay's budget plans, making use of newly devolved tax powers, are expected to draw a distinction between the tax regimes in Scotland and the rest of the UK.Mr Mackay's budget plans, making use of newly devolved tax powers, are expected to draw a distinction between the tax regimes in Scotland and the rest of the UK.
This is because the Scottish government does not plan to replicate a tax cut for higher earners proposed by the UK government, via the raising of the threshold for the higher rate.This is because the Scottish government does not plan to replicate a tax cut for higher earners proposed by the UK government, via the raising of the threshold for the higher rate.
While the UK government plans to up the threshold for the 40p tax rate to £45,000 and eventually £50,000, the SNP has pledged to raise it by no more than the rate of inflation. This means some Scots will pay more tax than those earning the same amount south of the border.While the UK government plans to up the threshold for the 40p tax rate to £45,000 and eventually £50,000, the SNP has pledged to raise it by no more than the rate of inflation. This means some Scots will pay more tax than those earning the same amount south of the border.
The Tories say this will "make Scotland the highest-taxed part of the UK" - and, citing a report from chartered accountancy firm Johnston Carmichael, warn it may force firms to top up salaries of high earners affected by the changes.The Tories say this will "make Scotland the highest-taxed part of the UK" - and, citing a report from chartered accountancy firm Johnston Carmichael, warn it may force firms to top up salaries of high earners affected by the changes.
Finance spokesman Murdo Fraser said: "The reality of the SNP's tax grab is that firms may end up having to pay high quality staff a 'Scottish supplement' simply to persuade them to stay and work here.Finance spokesman Murdo Fraser said: "The reality of the SNP's tax grab is that firms may end up having to pay high quality staff a 'Scottish supplement' simply to persuade them to stay and work here.
"What kind of message does that send out?"What kind of message does that send out?
"As Johnston Carmichael make clear, if these costs get too high, many firms will conclude that they're better off moving to a part of the UK that actually welcomes employers - not one that punishes them."As Johnston Carmichael make clear, if these costs get too high, many firms will conclude that they're better off moving to a part of the UK that actually welcomes employers - not one that punishes them.
"It is utterly self-defeating. The SNP claim the high moral ground, yet if enacted their policies will only end up starving our schools and hospitals of the tax revenues they need to survive.""It is utterly self-defeating. The SNP claim the high moral ground, yet if enacted their policies will only end up starving our schools and hospitals of the tax revenues they need to survive."
'Fair and progressive''Fair and progressive'
Mr Fraser will lead MSPs in a chamber debate on taxation ahead of Thursday's budget announcement, with the motion simply reading "that the parliament believes business and families in Scotland should not be taxed more than those elsewhere in the UK". Mr Fraser is leading MSPs in a chamber debate on taxation ahead of Thursday's budget announcement, with the motion simply reading "that the parliament believes business and families in Scotland should not be taxed more than those elsewhere in the UK".
Mr Mackay has put forward an amendment, arguing that powers were devolved so they could be used. Mr Mackay put forward an amendment, arguing that powers were devolved so they could be used.
He said: "The purpose of the devolution of powers over income tax is to allow Scotland to make its own decisions on tax rates.He said: "The purpose of the devolution of powers over income tax is to allow Scotland to make its own decisions on tax rates.
"Powers over personal and business taxation should be used in a fair and progressive way that supports a sustainable economy.""Powers over personal and business taxation should be used in a fair and progressive way that supports a sustainable economy."
He added that parliament should "note the proposals from all parties on future tax rates, and acknowledge that taxation as a whole must be considered alongside spending plans to be meaningful."He added that parliament should "note the proposals from all parties on future tax rates, and acknowledge that taxation as a whole must be considered alongside spending plans to be meaningful."
Other opposition parties lodged amendments of their own promoting their own tax policies, with Labour, the Lib Dems and the Greens all backing more radical schemes.Other opposition parties lodged amendments of their own promoting their own tax policies, with Labour, the Lib Dems and the Greens all backing more radical schemes.
Labour's Kezia Dugdale said parliament should agree to a 50p top rate of tax for those earning over £150,000 a year, "so that the richest 1% pay their fair share to help stop the cuts and invest in public services".Labour's Kezia Dugdale said parliament should agree to a 50p top rate of tax for those earning over £150,000 a year, "so that the richest 1% pay their fair share to help stop the cuts and invest in public services".
Lib Dem leader Willie Rennie also backs a tax increase, with his amendment reading: "Investing in skills is the best way to strengthen the economy, and calls for a modest penny on income tax for this purpose, raising £500 million to transform Scottish education."Lib Dem leader Willie Rennie also backs a tax increase, with his amendment reading: "Investing in skills is the best way to strengthen the economy, and calls for a modest penny on income tax for this purpose, raising £500 million to transform Scottish education."
And Patrick Harvie from the Scottish Greens put forward an amendment saying "the SNP's manifesto proposals on tax make no significant changes to current income tax rates and thresholds", saying Holyrood should "support a tax system that will challenge inequalities in wealth and income".And Patrick Harvie from the Scottish Greens put forward an amendment saying "the SNP's manifesto proposals on tax make no significant changes to current income tax rates and thresholds", saying Holyrood should "support a tax system that will challenge inequalities in wealth and income".