Dispute over winners and losers in strath after tax changes
An estimated 98,000 Highlanders on low and middle incomes will see their income tax cut today.
The boost has come about as a result of the increase in the amount that people can earn tax free announced in the recent Budget.
However, Scottish Labour has said that many people in the region will be worse off than before because of changes to child tax credits also coming into effect from today.
Lib Dem local MP Danny Alexander said that an additional 5,300 people in the region will be lifted out of paying tax altogether.
Today is the start of the new tax year, and the income tax threshold will rise by £630 to £8105. This follows the increase of £1,000 last year.
The latest Budget announced a further rise in the tax free threshold of £1100 - the largest ever - to take place next year.
Mr Alexander said the moves by the coalition government are being made to fulfil the Liberal Democrat election pledge to raise the amount people can earn before paying income tax to £10,000.
The Chief Secretary to the Treasury said: "On Friday, the personal allowance, the bit of your income you get that you don’t pay tax on, will go up.
"When the Liberal Democrats entered the Coalition Government this stood at £6,475, now it is £8,105.
"This is a key Liberal Democrat policy being delivered by the coalition government.
"There is a further rise to £9,205 coming next year – that is the biggest income tax cut for working people for a generation.
"It has come from the front page of the Liberal Democrat manifesto, straight into your pocket: an estimated 98,000 basic rate tax payers in the Highlands will receive a £130 tax cut this year, on top of the £200 tax cut last year, and another £220 coming next year.
But Scottish Labour has said an estimated 7,700 families in the Highlands and Islands will be worse off.
They will no longer be entitled to tax credits following the introduction of changes to the payments for 2012/13.Rhoda Grant, Highlands and Islands Labour MSP said: “Raising a family is already financially difficult for very many people and it will get a lot worse for thousands of families in the Highlands when these new cuts are introduced“Household budgets will be subjected to further strain.“Families on modest and middle incomes could lose all their child tax credit that would be worth around £545 a year.“With one hand Chancellor George Osborne takes these credits away from hard-working families, and with the other he gives millionaires a tax cut.”
