Finance Secretary Kate Forbes delivered the 2022/23 Scottish Budget on 9 December 2021, setting out the Scottish Government’s financial and tax plans.

The Budget outlined the government’s spending plans, income tax and Land and Buildings Transaction Tax.

Announced in the Budget was almost £2 billion of low-carbon capital investment in infrastructure. This includes the first £20m of the 10-year Just Transition Fund to help the northeast and Moray transition from carbon-based industries.

The Scottish Budget announced the phased return of non-domestic rate liabilities, which had been subject to 100% relief due to the pandemic. Non-domestic rates will be 49.8p in the pound, however, rate relief for the retail, hospitality and leisure sectors will continue at 50% for the first three months of 2022/23, capped at £27,500 per ratepayer.

Small businesses with a rateable value of less than £15,000 on Scottish high streets will continue to pay no rates for all of next year, irrespective of which sector they are in, through the Small Business Bonus Scheme. Additionally, new builds will pay no rates for the first 12 months after occupation through the Business Growth Accelerator.

The Scottish Budget also announced that the Starter and Basic Rate bands of income tax (other than those for savings and dividend income) which apply to Scottish resident taxpayers will increase by inflation. The Higher and Top Rate thresholds will remain frozen. 

Ms Forbes said:

‘The Scottish Budget will provide taxpayers with stability and support, set out clearly how we will accelerate our Covid recovery, and crucially, how our spending plans will set Scotland on a new ambitious path.’

Internet links: GOV.SCOT Budget statement GOV.UK news release

A report published by the Federation of Small Businesses (FSB) has revealed that the costs associated with going green have impacted small firms’ plans for becoming more sustainable.

The FSB’s report found that the majority of UK small firms are concerned about climate change but just one in three has plans in place to combat it.

67% of firms polled stated that they have started to address their energy usage, and 18% said they have invested in microgeneration.

However, 24% of businesses said that uncertainty around return on investment has prevented them from taking action, and 22% cited a lack of sufficient capital to invest in assets as a barrier.

The business group is urging the government to launch a ‘Help to Green’ initiative and roll out a nationwide scrappage scheme.

National Chair of the FSB, Mike Cherry, said:

‘If we are to successfully transition to net zero, it’ll be through grassroots action, enabled by smart and supportive policies.

‘Whilst the Chancellor rightly embraced some of our proposed changes in this area at the Budget, it was disappointing to see that the government’s recent net zero strategy contained only four specific mentions of small business.’

Internet links: FSB website

New rules to help protect pension savers from scammers have become law.

Under the regulations, pension trustees and scheme managers will be given the power to stop suspicious transfers before cash gets into the hands of fraudsters.

Fraudsters frequently offer ‘too good to be true’ incentives to pension savers, such as free pension reviews, early access to pension cash and other time-limited offers. Lured in by these bogus offers, individuals are then tricked into transferring their savings into a scam scheme and defrauded out of their money.

Between January and May 2021, pension scam losses totalling over £2.2 million were reported to Action Fraud.

The new regulations will take force on 30 November. From this date, trustees and scheme managers will be able to prevent transfer requests if suspicious activity is suspected by giving it a ‘red flag’. If a red flag is present, the transfer cannot go ahead.

Where fraud is suspected, trustees and scheme managers will be able to pause transfer requests by giving it an ‘amber flag’. In this scenario, the pension saver will need to prove they have taken scam specific guidance from the free Money and Pensions Service before the transfer can go ahead. This is the only way a transfer can then proceed.

Nicola Parish, The Pension Regulator’s (TPR) Executive Director of Frontline Regulation, said:

‘We welcome these new regulations which further empower trustees to act as the first line of defence against scammers.

‘We are pleased these new rules enshrine in legislation two of the key parts of the pledge to combat pension scams – around due diligence measures and issuing members warnings of high-risk transfers.

‘We urge all trustees and pension providers to take note of these new rules and continue to play their part in stopping scams.’

Internet links: TPR website

Optimism improved for firms across the services sector in the three months to November, according to the latest Service Sector Survey from the Confederation of British Industry (CBI).

However, cost growth continued to pick up, increasing at the fastest pace since survey records began in 1998. Additionally, business volumes continued to grow at a strong pace across the services sector, although there are signs of slowing growth.

The CBI found that cost pressures are building, with both consumer services and business and professional services seeing costs rise at the fastest pace in survey history.

As a result, selling price growth accelerated too, with expectations for significantly faster growth in the coming quarter for both sub-sectors. Despite elevated cost pressures, profitability grew in business, professional and consumer services, with the strongest growth recorded since February 2018 for the latter.

Charlotte Dendy, Head of Economic Surveys and Data at the CBI, said:

‘With COVID still a concern with impacts for consumer confidence together with cost and supply chain issues continuing to bite, a difficult winter lies ahead.

‘It is therefore vital that the government works with business to help address these challenges, ease cost and supply pressures, giving businesses the platform to ensure the recovery does not fizzle out before Christmas.’

Internet link: CBI website