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National Insurance Contributions: Scotland

Question for Treasury

UIN 284394, tabled on 2 September 2019

To ask the Chancellor of the Exchequer, whether he has plans to change the level of national insurance paid at the upper earnings limit and what assessment he has made of the potential of effect of that change on the (a) Scottish Government block grant and (b) tax differential between Scotland and the rest of the United Kingdom.

Answered on

9 September 2019

The Government is committed to keeping taxes low to support working people to keep more of what they earn and to encourage individuals to progress.

This is why the Government met its commitment to raise the higher rate threshold to £50,000, one year early. This has ensured that nearly 1 million fewer people pay the higher rate of tax compared to 2015-16.

Decisions on the Higher Rate Threshold and the National Insurance Contributions (NICs)s Upper Earnings Limit and Upper Profits Limit are taken by the Chancellor at fiscal events.

The mechanism through which the changes to income tax policy affect the Scottish Government’s block grant are set out in the Scottish Government’s Fiscal Framework. When the UK Governments increases the Higher Rate Threshold, the Scottish Government receives an increase to their block grant commensurate to the Higher Rate Threshold increase. National Insurance Contributions are reserved to the UK government, and therefore any changes to NICs do not affect the Scottish Government’s block grant.

Answered by

Treasury