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How do the tax and national insurance changes affect Scots?

National Insurance is controlled at Westminster, while income tax rates and thresholds are for Scottish ministers to decide.

So the increase in the rate of both employers’ and employees’ National Insurance Contributions (NICs) affects every part of the UK.

On payroll earnings, the NIC rate is going up next month from 12% to 13.25%. Employers face a similar rise in their contribution.

The Spring Statement eased the impact of that increase by raising the threshold at which people start to pay NICs – from £9,570 to £12,570. 

That means a flat-rate giveaway to everyone paying NICs of £352. It doesn’t affect employer contributions.

That change brings NICs into line with the starting point of income tax, for all UK income tax payers. The starting threshold is one income tax power retained at Westminster for all of the UK.

Rishi Sunak stated his intention to cut the basic rate of income tax at Westminster in 2024, just ahead of an expected election.

If he delivers on that, the basic rate would come down from 20p in the pound to 19p. That would not affect tax paid on Scottish income – not directly, anyway, and it would affect tax paid on Scottish savings interest.