ICAEW Chart of the week

This month's Scottish Budget was slightly overshadowed by events in Westminster, but if you live north of the border the £42.5bn that the Scottish government plans to spend next year will possibly be more of interest.

Our chart shows, the largest elements of the budget are £14.3bn for health and £11.9bn for local government. With £4.5bn to fund pensions for NHS workers and teachers.

£15.3bn, or just over a third of the total, is funded by devolved taxes – with £11.7bn coming from income tax. The remainder is the block grant of £19.9bn, a share of national insurance and other UK-wide taxes of £2.3bn, £4.5bn in funding for NHS and teacher pensions plus borrowing of £0.5bn for capital projects.

The big news was the decision to maintain the higher rate threshold at £43,430, diverging from £50,000 in other parts of the UK. A penny less of income tax on earnings up to £14,549 and a penny more on all earnings over £24,944, means that there are now 12 tax bands for employment income. This compares with 9 south of the border.

This is partly because Holyrood doesn’t control national insurance in the way that it does income tax, creating extra bands where the thresholds do not line up. However when it comes to complexity in tax systems, less is probably better!