Treasury to give Scotland £300m as tax hike compensation

The Scottish authorities should person an other £300m to screen the planned summation to leader National Insurance contributions, the BBC has learned.

Last week, Treasury officials are said to person told their counterparts successful Edinburgh that they should person successful the scope of betwixt £295m and £330m other - though the Scottish authorities has said the taxation hike would outgo them £500m.

The chancellor announced the alteration successful the UK Budget past period to boost nationalist work funding.

A UK authorities root has present told the BBC determination is "hundreds of millions of pounds" heading to Holyrood.

They said: "In full Holyrood volition person much than £5bn other to walk arsenic a effect of the UK budget.

"There are nary much excuses, Scots expect transportation from the SNP and to usage this wealth to trim NHS waiting times and rise attainment successful our schools, not capable successful a fund achromatic spread created by years of fiscal mismanagement and waste."

Chancellor Rachel Reeves said Scotland volition person £3.4bn successful further backing successful 2025-26 erstwhile she laid retired her Budget plans - though she suggested this did not see compensation for National Insurance arsenic she urged Holyrood ministers to walk the wealth "wisely".

The UK authorities said that other funds would beryllium provided connected apical of the £3.4bn to marque up for the other unit costs.

The Scottish authorities is besides acceptable to person an further £1.5bn for this fiscal year, 2024-25 - though it said this was successful enactment with its fund expectations.

National Insurance contributions are the UK's second-largest gross watercourse down income tax.

It is paid by workers and the self-employed connected net and profits, and by employers connected apical of the wages they wage out.

This, of course, affects nationalist assemblage employees who enactment for the Scottish government.

About 600,000 radical are employed successful Scotland’s nationalist sector, making up 22% of the full workforce – compared to astir 17% successful the UK arsenic a whole.

That has fuelled concerns astatine Holyrood that Scotland could beryllium abbreviated changed if compensation for the National Insurance summation is not proportional to its nationalist sector.

The Scottish Finance Secretary Shona Robison had urged the Treasury to supply what she called “clarity” connected however immoderate mitigation mightiness work.

Speaking earlier this month, Ms Robison said: “The UK government’s leader National Insurance hike could hamper services successful Scotland to the tune of astir £500m – and the much we look astatine this announcement, the much acrophobic we are by it.

“With the Treasury failing to supply clarity astir immoderate mitigation process astatine the clip of the budget’s publication, services crossed Scotland are feeling increasing disorder and alarm astatine the precise clip wherever they request to beryllium capable to program ahead.”

A Scottish authorities spokesperson said the Scottish Parliament had agreed the UK authorities should reimburse the outgo of the alteration - "over £500m".

They said: "This UK authorities argumentation risks hampering economical maturation and damaging nationalist services and whilst discussions with the Treasury are ongoing, we inactive bash not person certainty up of the Scottish budget.”