Scottish Government tax policy hurting business warns star of BBC’s The Apprentice

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Setting out the “difficult context” in which companies operate, he told the audience – which included the First Minister, Scottish Labour’s Anas Sarwar and Scottish Tory leader Russell Findlay – that firms face “mounting problems.”

“Companies in this room all face increasing employers [National Insurance] as a new Westminster government tries to stabilise the economy.

“North of the border, there is little business rate relief and the additional recognition tax imposed by the Holyrood administration, which can make attracting top talent more difficult still.”

Mr Soutar is known for his yearly appearance on the hit BBC Show The Apprentice when he interviews the final five candidates hoping for a business deal with Lord Alan Sugar. 

.@MikeSoutar‘s interviews throughout the years have been brutal! 😳 #TheApprentice #TheInterviews #iPlayer pic.twitter.com/qCmQxfY3gJ

— The Apprentice (@bbcapprentice) March 16, 2023

Earlier this week, Scottish Financial Enterprise (SFE) Chief Executive Sandy Begbie called for rates to be brought in line with those south of the border.

The Scottish Government introduced a new ‘advanced’ rate of 45% on incomes between £75,000 and £125,140 last year. They increased the top tax rate to 48%.

Other changes to the basic, intermediate and higher rates mean those with an annual income of more than £26,562 pay more income tax than those in the rest of the UK.

The biggest difference is for those near the threshold between the advanced and top tax bands.

Someone on £125,000 would pay £5,221 more tax than if they were south of the border.

Earlier this month, a recent report by the Institute for Fiscal Studies (IFS) warned the changes may have “slightly reduced” revenues for Holyrood.

In their paper, they called for Ministers to “at least pause” any plans to increase income taxes for higher earners in Scotland in next week’s Budget.

The think tank stressed there is a “significant degree of uncertainty about the scale of effects”, but said two studies by HMRC suggest “previous increases in Scotland’s top rate of income tax will have slightly reduced revenues rather than slightly increased them”.

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Finance Shona Robison was questioned on the issue at the Scottish Parliament by Scottish Tory economy spokesman Murdo Fraser.

She told MSPs: “The IFS were clear that they did not have any definitive evidence of any suggested reduction of revenue raised from the highest earners in Scotland in recent years.”

She added: “From the introduction of Scottish income tax in 2017/18 more taxpayers have come to Scotland than have left, with net inflows averaging almost 4,200 per year, and more high earning taxpayers came to Scotland than left in 2021/22, the latest year for which we have data.”

While the Fraser of Allander Institute’s Scottish Business Monitor found that 34% of Scottish businesses have felt the effect of Scottish Government income tax policy, 57% have experienced little to no impact.

In his speech at the SCC, Mr Soutar said were global issues “building to a head” for businesses too.

“Just as we start to recover properly from the effects of the Covid pandemic, the wars in Ukraine and the Middle East, an ongoing worldwide cost of living crisis, the reality of operating outside the European trading zone, and the new US president who would serve to usher in a new era trading tariffs and with that global inflation.”

Nevertheless, he struck an upbeat tone, telling the dignitaries and industry leaders that he believed “economic downturns provide the best conditions to launch new products, new services and new companies.”

“If you can establish an enduring company supported by customer needs during the recessionary downturn, then when the good times come back, and believe me, they will, you will rise faster than the rest.

“This, above all else, is the point to take away. The tide will come back in. Stay afloat. Use the time to jettison what you don’t need and design new products and services for the future.

“You’ll survive. You will be fit for a purpose, and when better times come, you will be in unbeatable shape, because if there’s one thing I know, it’s that innovation can turn even the toughest market into a landscape full of possibilities.”