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FSB: Income tax move steers us into uncharted waters

The Scottish Government’s Cabinet Secretary for Finance Derek Mackay has presented his draft budget for 2018-19, outlining changes to income tax in Scotland, amongst other measures. 

Andy Willox, FSB’s Scottish policy convenor, said: “We wanted to see a Scottish Government budget which offered firms a little ballast in choppy market and political conditions. Instead the Scottish Government has chosen to steer us into uncharted economic waters. 

“A majority of those in business in Scotland were against changes to the income tax regime. However, the Cabinet Secretary underlined that his tax changes were designed to cause minimum economic disruption. Only time will tell what the wider impact will be, but our members have a real concern about the effect of these changes on household spending power. 

“On rates, we’re pleased to see Ministers seize upon the most sensible recommendations of the Barclay review. Moving to a different inflation measure will mean a smaller increase to many firms’ bills. Further, the introduction of a new business accelerator relief is a clever move that deserves plaudits. By far the most valuable commitment in the budget for Scottish smaller firms is the retention of the Small Business Bonus rate relief. 

“It is great to see the Scottish Government allocate funding to fulfil their manifesto commitment to address Scotland’s patchy digital infrastructure. We need to see governments in Edinburgh and London work together to address broadband and mobile issues north of the border.  

“Other initiatives – like cash for the Scottish National Investment Bank and support for the enterprise and skills agencies – won’t mean a lot to many ordinary businesses. Ministers have to ensure that these bodies and initiatives deliver for local economies and the wider business community.”