OBR analyzes tax liability for England and tax rates in Scotland
What happened
The Office for Budget Responsibility analyzed tax liability for England while also examining tax rates in Scotland. According to reports, HMRC estimated the total income tax liability for 2025/26 to be £327bn, representing 35% of the total tax payable for that year. For individuals in England, tax rates on earnings above the personal allowance are 20%, 40%, and 45%, while different rate bands apply for people living in Scotland.
From icaew.com
Why it matters
The analysis provides fiscal forecasts for England, which the Office for Budget Responsibility tracks. The OBR also analyzes the tax policies of Scotland. These estimates directly affect government revenue projections and policy planning.
From icaew.com
Who's involved
- Office for Budget ResponsibilityTracks and forecasts key financial metrics for England and analyzes tax policies of Scotland.
- ScotlandMaintains tax rates and fiscal policies that the Office for Budget Responsibility analyzes.
- EnglandIs the subject of tax liability estimates tracked by the Office for Budget Responsibility.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- governmentSpeculative
The government may see its revenue projections and policy planning affected by the tax liability estimates.
- Department for Work and PensionsSpeculative
The Department for Work and Pensions might see increased demand for financial support if fiscal drag raises the tax burden.
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The entities involved
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Scotland
country in north-west Europe, part of the United Kingdom
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England
country in north-west Europe, part of the United Kingdom
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Office for Budget Responsibility
an advisory non-departmental public body
Related events
- Devolved governments in Scotland and Wales have determined their own tax rates.
- The Scottish Government manages fiscal affairs while noting that policies from Westminster affect its tax receipts.
- The Chancellor increased income tax on property income, which is devolved to Holyrood, raising concerns about rental supply in Scotland.
- Both the Westminster and Scottish governments addressed the ongoing cost of living crisis.
- The Scottish Government is providing figures detailing recent business closures across Scotland.