The Fraser of Allander Institute – in association with
ICAS – held a post-Spring Budget briefing today (March 10) at the University of
Strathclyde.
The presentations from Director, Graeme Roy and Head of
Fiscal Analysis, David Eiser, outlined how the revised forecasts for both
the economy and borrowing were largely temporary – with the UK Government still
on track to borrow around £100bn more over the forecast period than they
thought prior to the EU referendum.
These borrowing forecasts are not that dissimilar to those
put forward by the SNP during the UK 2015 General Election.
The presentations also discussed developments in the
Scottish Budget, including the decision to freeze the higher rate threshold in
Scotland and the additional one-off resources found to finance the deal between
the Scottish Government and the Green Party to pass 2017-18 Budget.
A key part of this deal was the use of around £125 million
of underspend from 2016-17 – the exact same amount of money transferred to the
Scottish Government in Barnett consequentials in Wednesday’s Budget.
Charlotte Barbour – Head of Tax at ICAS – talked through the
key tax changes facing businesses and individuals in Scotland as a result of
changes by the UK and Scottish Governments. These reforms and policy decisions
mean that different incentives – such as the decision for certain people to be
self-employed or set up as an incorporated businesses – could become an
increasingly important but as yet unknown factor in determining future Scottish
tax revenues. Such tax inventive changes, alongside potential behavioural
responses, need to be closely monitored.
Source: Fraser of Allander
Institute
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