Posted on: 01 March 2021
Scottish Government spending for 2021/22
In January 2021, the Scottish Government brought their budget announcement forward in light of the COVID-19 pandemic to offer the people and businesses of Scotland some assurances and guidance as the Coronavirus pandemic continues.
If you run a Scottish based business, here are some of the key points from the Scottish budget announcement that you need to know.
Scottish budget aims
In the Scottish budget announcement, it was announced that the aims of the spending would be to:
- Create new, good and green jobs
- Promote lifelong health and wellbeing
- Promote equality and help young people realise their potential
The 2021/22 budget builds on the support provided from the 2020/21 budget, whilst reflecting the efforts of Scotland’s public services.
Key points for Scottish businesses
The thing that is on most peoples’ minds at the moment is the financial worries caused by the COVID-19 pandemic.
Whilst the Scottish Government has outlined plans for job support, healthcare and other issues impacted by COVID-19, there will be an unprecedented £869m to be used specifically to tackle COVID-19.
Skills and training
£1.1bn will be provided to help protect jobs, including a £125m investment in employment support such as the National Transition Training Fund and the Young Person’s Guarantee training schemes, and £230.9m for the Skills Development Scotland scheme.
The Scottish Government are also putting £2.7bn into education and skills, £1.9bn of which will support universities and colleges to help young people into work with new skills.
Jobs and economy
The Scottish Government announced £100m for the Green Job Fund to create a more environmentally friendly job market, a £51.9m fund to help the tourism sector, including a doubling of the Rural Tourism Infrastructure Fund. There is also an additional £17m of extra funding for enterprise networks.
There is a £1.2bn commitment to supporting economic recovery, which includes £230m to stimulate the economy and £100m to protect jobs, support people being made redundant and help those out of work.
There is also £3bn of direct business support to allow businesses to shut down for extended periods if necessary whilst being able to still provide salaries for their staff.
Scotland’s rail networks will receive £1.3bn of funding, whilst motorways and trunk road infrastructure will receive £825.9m.
As part of the £6bn in capital investment, the Scottish government are dedicating around £100m to provide super-fast digital connectivity to Scotland.
Tax is key in raising money for the treasury to ensure that all of the pledges can be provided by the government. Here are the new tax rules outlined in the budget.
- Income tax rates and the banding will be unchanged for 2021/22.
- Thresholds for all but the top rate to rise with inflation.
- Earnings between £12,570 and £14,667 will have a starter rate of 19%.
- A Scottish basic rate of 20% will be charged on earning up to £25,296
- Between £25,296 and £43,662 will pay a rate of 21%.
- A higher rate of 41% and a top rate of 46% will apply to those earning more than £150,000.
- The tax cut for house buyers will end on 1st April 2021.
- Rate relief for retail, hospitality and leisure businesses will continue for at least another three months.
- Non-domestic poundage rates will be cut to 49p.
The full budget announcement
For a more in-depth look into the full budget announcement from the Scottish government, visit the Government website.
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Business Guidance11 February 2021
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