Scotland’s 48% top tax rate leads to £22 million shortfall
Scotland raised its top rate of income tax to 48 percent on earnings above £125,140. HM Revenue & Customs data for the 2024‑25 fiscal year shows the Scottish government collected about £22 million less than expected, a result analysts attribute to high‑earners restructuring their remuneration – for example, taking dividends or increasing pension contributions – to avoid the higher levy.
Lawyer and analyst Dan Neidle of Tax Policy Associates described the shortfall as a conservative estimate that could be as high as £30 million, and noted that a 1‑penny increase in the rate might have raised £53 million had behavioural shifts not occurred. The findings have sparked renewed scrutiny of UK politicians such as Andy Burnham and John Healey, who are considering similar tax measures for wealthy individuals.
Entities: Andy Burnham · Dan Neidle · HM Revenue & Customs · John Healey · Scotland
Claims
What the coverage asserts, and how well corroborated each claim is across sources.
- [● 3 SOURCES] A 1‑penny increase in the top rate could have raised £53 million without behavioural shifts. (Dan Neidle analysis)
- [● 3 SOURCES] The shortfall could be as high as £30 million, according to a conservative estimate. (Dan Neidle analysis)
- [● 3 SOURCES] Scotland increased its top income tax rate to 48 percent for earnings above £125,140. (Tax policy change)
- [● 3 SOURCES] In the 2024‑25 fiscal year Scotland collected £22 million less revenue than expected due to the tax hike. (HMRC data analysis)
- [● 3 SOURCES] Tax Policy Associates conducted the analysis of the tax data. (Article description)
- [○ 1 SOURCE] The findings have prompted scrutiny of UK politicians Andy Burnham and John Healey over similar tax proposals. (Article commentary)
- [● 3 SOURCES] High‑earning individuals avoided the tax by shifting income to dividends or pension contributions. (Tax data analysis)
- [● 3 SOURCES] The analysis references the Laffer curve to explain the revenue decline. (Dan Neidle analysis)