London Daily

Focus on the big picture.
Friday, Jun 12, 2026

Tax and benefits system 'more progressive in Scotland than rest of UK'

Tax and benefits system 'more progressive in Scotland than rest of UK'

By April, the poorest 10% of Scottish households are set to have incomes £580 per year higher than they would under the system in England and Wales.
The tax and benefits system in Scotland is more progressive than elsewhere in Britain, a report has said.

The Institute for Fiscal Studies think tank said that, by April, the poorest 10% of Scottish households are set to have incomes £580 (4.6%) per year higher than they would under the system in England and Wales.

Tax and benefit measures introduced north of the border since 2017 have reduced average household incomes by £210 (0.5%).

Later on Thursday, MSPs will vote on the proposed Scottish tax bands for the next financial year, which would increase taxes for higher earners.

The IFS said policies introduced over the last few years, such as changes to the benefits system, have particularly increased the incomes of poorer families with children.

Amongst the poorest 30%, Scottish reforms are set to raise the incomes of households with children by around £2,000 per year on average, the IFS said.

The new Adult Disability Payment is forecast to increase disability benefit spending by around a fifth when it is rolled out.

Research economist Tom Wernham said: "The Scottish government has used devolved income tax and benefit policy to make the system more progressive, as well as to raise more revenue to fund public services.

"These changes imply big increases in income for poorer households with children.

"But to fund their policies they are increasingly relying on taxing higher earners."

"With this group in particular, there is a risk that higher taxes will incentivise tax avoidance efforts, such as converting income into dividends - to which Scottish tax rates don't apply - or even migrating across the border.

"Most of the additional revenue from raising the additional rate to 45p is set to be lost due to responses such as these - suggesting there is a limit to how much further this strategy can be pushed.

"If the Scottish government does want to raise more revenue from richer households, it may need to turn to other taxes under its control, such as council tax."
Newsletter

Related Articles

0:00
0:00
Close
NHS Trust Secures Funding for AI Tool to Detect Heart Failure Earlier
Government Unveils £4.5 Billion Investment Plan for Walking and Cycling Infrastructure
Nationwide Reports UK House Prices Falling as Borrowing Costs Remain Elevated
Centre for Social Justice Says Two Million Britons Are Using Illegal Loan Sharks
UK Carmakers Warn EU Local Content Rules Could Damage British Manufacturing
UK Government Imposes Emergency Ban on Seven Potent Synthetic Opioids
Royal Navy Completes Major North Atlantic Anti-Submarine Exercise Off Norway
NHS Figures Show Nearly 3,000 Patients a Day Receiving Care in Hospital Corridors
CBI Cuts UK Growth Forecast as Middle East Tensions Drive Inflation Risks Higher
Dan Jarvis Appointed UK Defence Secretary Following Major Government Reshuffle
University College London Study Links Physical Punishment to Higher Risk of Bullying
East Midlands Railway Unveils First Refurbished Train in £60 Million Modernization Programme
RNLI Issues National Water Safety Appeal Ahead of Expected Heatwave
Climate Change Raises Subsidence Risks for Millions of Homes Across Southeast England
Manchester Advances Plans for Underground Piccadilly Station With £1 Million Funding Commitment
Anti-Immigration Violence Continues in Belfast Amid Heightened Security Concerns
UK Law Locks Great British Railways Into Public Ownership
Office for National Statistics Adopts Supermarket Checkout Data for Inflation Measurement
Applied Atomics Launches With $500 Million Space Infrastructure Order Book
BYD Plans Nationwide Rollout of Ultra-Fast EV Charging Network
UK House Prices Unexpectedly Fall in May
CBI Warns UK Growth Is Becoming Increasingly Dependent on Public Spending
Makerfield By-Election Fuels Speculation Over Labour’s Future Leadership
Britain Declines to Join EU SAFE Defence Fund
UK Unveils 2040 Emissions Target Despite Strong Political Opposition
Government Orders Full Review of Palantir’s NHS Data Contract
UK Borrowing Costs Climb as Markets Price in Further Bank of England Rate Rises
Resident Doctors Confirm Five-Day NHS Strike Across England
Violent Anti-Immigrant Riots in Belfast Spark Political and Diplomatic Tensions
United Kingdom Sees Recovery in Horizon Europe Research Funding Share to 9.3 Percent
UK Inflation Holds at 2.8 Percent as Office for Budget Responsibility Flags Persistent Price Pressures
United Kingdom Launches National Anti-Fraud Framework to Combat Rising Pension Scam Losses
United Kingdom Expands Sanctions on Israeli Groups While Funding Palestinian Authority Salaries and Gaza Mine Clearance
United Kingdom Issues Three-Month Ultimatum to Major Technology Firms Over Child Online Safety Controls
United Kingdom Government Moves Toward Blanket Social Media Ban for Children Under Sixteen
Widespread Anti-Immigration Rioting Erupts Across Belfast After Knife Attack Linked to Asylum Seeker
Farmers Warn of Crop Losses Following Months of Unseasonal Rainfall
Civil Aviation Authority Launches Review of Regional Airport Operations
Met Office Issues Heat-Health Alert Across Parts of England
National Grid Introduces New Measures to Protect Winter Energy Supply
Northern England Rail Upgrades Receive Additional Government Funding
Wales Advances Green Hydrogen Strategy to Decarbonize Heavy Industry
UK Expands Recruitment Incentives to Address Shortage of STEM Teachers
High Court Opens Door to Climate Liability Claims Against Major Industrial Emitters
Police Service of Northern Ireland Investigates Major Personnel Data Breach
Defense Ministry Overhauls Procurement System to Accelerate AUKUS Submarine Program
Net Migration Remains Above Government Expectations, New Data Shows
UK and Scottish Governments Agree Framework for Expanded North Sea Wind Development
UK Treasury Launches New Tax Incentives to Boost AI and Semiconductor Investment
Bank of England Signals Continued Caution on Interest Rate Cuts
×