Tax and benefits system 'more progressive in Scotland than rest of UK2023

  According to a report, Scotland's tax and benefit system is more progressive than that of other parts of Britain.

According to the Institute for Fiscal Studies, the poorest 10% of households in Scotland will have annual incomes £580 (4.6%) higher than in England and Wales under the current system by April.

Since 2017, North American tax and benefit reforms have resulted in a £210 (0.5%) decrease in the average household income.

MSPs will vote later on Thursday on the proposed Scottish tax bands for the upcoming fiscal year, which would raise taxes for those with higher incomes.

According to the IFS, policies implemented in recent years, such as changes to the benefits system, have boosted the incomes of poorer families with children in particular.

According to the IFS, Scottish reforms are anticipated to increase the annual incomes of households with children by approximately £2,000 among the poorest 30%.

When implemented, it is anticipated that the Adult Disability Payment will result in a 5% increase in disability benefit expenditures.

Tom Wernham, a research economist, stated: The Scottish government has used devolved income tax and benefit policies to increase revenue for public services and make the system more progressive.

"These progressions suggest large expansions in pay for less fortunate families with kids.

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

"With this group in particular, there is a risk that higher taxes will incentivize tax avoidance efforts, such as converting income into dividends, which are exempt from Scottish tax rates, or even migrating across the border," according to The Ian King Business Podcast.

"The majority of the additional revenue from raising the additional rate to 45p is expected to be lost as a result of responses like these, indicating that this strategy has a limit to how far it can be pushed.

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