That concludes our live coverage of the Scottish budget.

If you're just joining us or need a recap here are the main points from today's announcement by the Deputy First Minister Shona Robison:

• A new tax band of 45p in the pound will be created in Scotland which will apply to those earning between £75,000 and £125,140
• The top rate of tax, levied against those earning above this figure, will rise by 1% next year to 48p in the pound
• Ms Robison said it would bring in another £1.5bn to Scotland's finances next year
• The Scottish government will fully fund its proposed council tax freeze, providing local government with the equivalent of a 5% rise
• Funding for NHS boards will rise by £550m - or 4.3% - and amounts to £13.2bn
• Other announcements include freezing business rates for premises valued at less than £51,000; giving 100% rates relief to hospitality businesses in Scotland's islands; and an increase in the Scottish Child Payment - by the rate of inflation - to £26.70 per week.
• Scottish Labour described the budget as "chaotic", while the Scottish Conservatives said the government was not taking responsibility for Scotland's fiscal circumstances
• Meanwhile, Scottish Secretary Alister Jack said making Scotland "the highest taxed part of the United Kingdom" was "bad for our economy".
• But the Institute of Directors Scotland said the announcement had been a "mixed bag" for businesses

Thank you for joining us. Today's live page coverage was brought to you by Graeme Esson, Catherine Lyst, Paul O'Hare, Craig Hutchison, Steven Brocklehurst, Auryn Cox and Morven Mckinnon.

What do the tax changes mean?published at 18:08 Greenwich Mean Time 19 December 2023

18:08 GMT 19 December 2023

Garry Tetley, tax partner at Deloitte, says the costs of running the country "continue to rise".

And he adds the lack of economic growth means that tax revenues will not keep pace with planned expenditure so options for the Scottish government are limited.

He says: "The Scottish Fiscal Commission estimate that today's announcements to introduce a new 45% rate, together with an increase in the top rate to 48%, will raise an additional £82m in 2024-25.

"This is in addition to an extra £307m through the freezing of the higher rate threshold. The additional tax for higher earners living in Scotland is growing in significance.

"The balance between efficient tax collection and attracting talent becomes ever more challenging."

Mr Tetley says the Scottish higher rate threshold remains at £43,662 for a fourth year running, which is still significantly lower than the UK higher rate threshold of £50,270. It has been frozen until 2027/28.

He adds: "Employees earning between these thresholds also pay 10% national insurance, which results in a combined marginal tax rate of 52% in this income bracket for those living in Scotland.

"Lower earners in Scotland continue to pay less tax than those in the rest of the UK; the break-even point for 2024-25 is £28,867."

The number of people set to pay tax at a rate of 42% or more will increase by 62,000 next year.

The freezing of the higher rate tax band and top rate tax band plus the new advanced band (45% over £75,000) means that the number of people ‘dragged’ into the higher rate or above is now 647,585.

The threshold at which workers start to pay the higher rate is £43,663.

In 2023/24, 585,704 Scots paid income tax at the higher or top rate.

The effect, known as ‘fiscal drag’ happens when tax thresholds do not rise with inflation.

This does not take into account any pay rises that might be awarded.

Kirsten Campbell
BBC Scotland political correspondent

Tax too highly and you start to see behavioural changes, for example when people stop working overtime, or decide against renting out a second home, because it's no longer worth it.

The Scottish Fiscal Commission has done some calculations and it found that the new 48p top rate on salaries over £125,140 could raise £53m. But it concluded that you'd lose £45m of that because people would act differently. So the yield would actually be £8m.

It's an example of the Laffer curve, which the Conservatives were talking about ahead of the budget. This is an economic theory that states that if tax rates are increased then the money raised could actually fall.

It's often used to justify tax cuts, though economists disagree about the level at which tax rates start to act as a disincentive to work.

A surprise council tax freeze which was first announced by the first minister at an SNP conference will be "fully funded", according to the Scottish budget.

The deputy first minister tells BBC Radio Scotland's Drivetime programme that she thinks giving local authorities £150m instead of the £300m they had asked for is a "fair offer" in relation to the council tax freeze.

Shona Robison adds that the figure of £300m calculated by the Fraser Of Allander Institute is about the same as the Scottish government's offer if you take away the council tax multiplier.

"We will continue to consult with local government about how we will take that forward," she says.

Ms Robison says she hopes councils such as Orkney who had hoped to raise council tax by 10% will not reject the Scottish government's offer.

She adds that every council will be offered the 5% rate.

Let's get some more reaction to today's budget and the new higher rate tax band for anyone earning over £75,000.

Catherine McWilliam, from the Institute of Directors Scotland, tells Radio Scotland's Drivetime today's budget was always going to be difficult.

"Today's announcement really is a bit of a mixed bag for business leaders."

The freeze on business rates and the commitment to accelerating the planning system are both "very welcome", she says.

"However the introduction of another tax band is disappointing because it does create further divergence from the rest of the UK."

She says this will further inhibit Scotland's ability to attract and retain talent.

Jamie McIvor
BBC Scotland News Correspondent

The debate amongst council leaders on Thursday over the funding package from Holyrood and the council tax freeze is set to be lively.

The government argues that providing funding to finance the equivalent of a 5% council tax rise could beat inflation next year.

This argument is based on forecasts of how inflation may continue to fall. The Bank of England hopes CPI inflation may reach 3.1% by the fourth quarter of next year.

But many councils had been looking to increase the tax by more than 5% to make up for the ongoing effects of inflation on their budgets.

One of Labour’s most prominent councillors says the overall amount being given to councils is more important than the council tax freeze in isolation.

Stephen McCabe, the leader of Inverclyde Council, says: “We need to assess how much extra we are getting overall once we strip away the smoke.. 3% inflation is optimistic. Do you think the unions will settle for 3% pay rises?”

He adds that the best way to protect local services would be to give the funding earmarked for the council tax freeze to councils but still allow them to increase the tax locally if it was “in the best interests of our communities”.

Image source, Getty Images

Commenting on today’s budget the Scottish Greens finance spokesman Ross Greer tells Radio Scotland's Drivetime: “This budget is a budget that does prioritise people and planet."

Mr Greer points to a £1bn uplift in social security payments which is about helping children out of poverty.

School meal debt is being cancelled and free school meals are being expanded, he says.

Mr Greer adds: "Of course we want to go further and quicker on all of this but the UK government has given us a nearly impossible budget settlement.

"This budget is not everything that we wanted it to be because we were facing a £1.5bn gap going into it.

"Given that gap we have prioritised people and planet that's why we're seeing this really significant increase in social security spending and a record amount of spending on climate action."

First Minister Humza Yousaf says on X, external, formerly known as Twitter, that the Scottish budget is a statement of his government's values.

"That we value our NHS & other public services.That we will use every lever at our disposal to protect those in Scotland from the worst of Westminster harm.

"As well as a budget that supports a growing, green & fair economy."

Scottish Conservative leader Douglas Ross is less enthusiastic.

"I’ve never sat through a budget speech that didn’t have a single pause for applause or support from the back benches," he says on X.

"Even the SNP backbenchers couldn’t muster any enthusiasm for the budget from Shona Robison and Humza Yousaf that fails to support businesses and puts up taxes."

Anas Sarwar, the Scottish Labour Leader also took to social media to criticise the budget.

He posted: "No ideas, no vision, just more managed decline from a tired and out of touch SNP Government.

"Instead, we have incompetence, waste and a failure to grow the economy."

Arts and culture funding falls short of previous promisepublished at 17:13 Greenwich Mean Time 19 December 2023

17:13 GMT 19 December 2023

Pauline McLean
BBC Scotland Arts Correspondent

An extra £15.8m for arts and culture is not to be sniffed at but it falls far short of the promised “doubling of the investment” made by the first minister at the SNP conference in October.

Only £13.2m of that money will come to Creative Scotland, and that includes the return of £6.6m which was cut, restored and then cut again.

Lottery regulations mean the money can’t be returned to the reserves.

The cultural sector stands on a precipice caused by standstill funding, Covid and the cost of living crisis. This funding won’t move it much further from the edge.

The Scottish government insist it’s the first step in a long term plan to invest up to £100m more in the arts and culture sector by the end of the decade.

Image source, PA Media

Scottish Secretary Alister Jack says the Scottish budget has further widened the tax differential between Scotland and the rest of the UK.

"Making Scotland the highest taxed part of the United Kingdom is bad for our economy," he adds.

"It deters business investment and punishes hard-working people."

Mr Jack says the Scottish government has a record block grant but "wastes" hundreds of millions of pounds and said it needs to stop blaming the UK government for its "self-inflected" budget deficit.

“The UK government is cutting tax for individuals and for businesses. The Scottish government should do the same," he says.

Jamie McIvor
BBC Scotland News Correspondent

Scotland's biggest teachers’ union has given a mixed response to the budget.

EIS general secretary Andrea Bradley welcomes the commitment to tackling the poverty related attainment gap in schools and the allocation of funding to cancel school meals debt.

She also welcomes the funding to employ more teachers on permanent contracts.

But she warns this must actually lead to more teachers being permanently employed, noting that teacher numbers across Scotland have fallen over the past two years.

Ms Bradley says councils would have “legitimate concerns” about their overall level of funding and education would be impacted by the decision to freeze the council tax.

Radio Scotland's Drivetime continues to bring you reaction and analysis to today's budget announcement.

Just after the news at 17:00 the finance secretary will be interivewed.

To listen here on this live page just click on the play icon at the top of the page.

James Cheyne
Reporting from Glasgow city centre

It's perhaps a little tricky to pick someone earning more than £75,000 out of a crowd of Tuesday afternoon shoppers.

But there is certainly plenty of money changing hands at this time of year in the high-end outlets of Glasgow's Princes Square.

Beneath the giant Christmas tree an orchestra of young people plays a wonderfully eclectic mix of Christmas tunes and movie classics.

And opinions on the new tax band for higher earners here are just as diverse.

"I don't think it's a good idea" says Jackie who is pushing her tiny five-week-old granddaughter in a pram.

"I think Scotland is in disarray now but no, I don't think it's very fair."

Stuart Rodger from Renfrewshire disagrees.

"Excellent" he says, "All for it."

"If you can afford to pay more tax we should pay more taxes", he says.

"Infrastructure is crumbling, the NHS is desperate for money, care is desperate for money, where is that money coming from? Tax."

Carrie from Ayr is just coming out of a fashion store.

She can see it both ways and her opinion is shared by many: "It's a difficult one. I do feel that they are very highly taxed. But I know they've got to get the money from somewhere."

Kirsten Campbell
BBC Scotland political correspondent

Finance Secretary Shona Robison says she’s making very different choices to the UK government.

In broad terms by increasing the tax take and not replicating the business tax cuts introduced by the UK government, the Scottish government has created a pot of money to spend on public services.

There’s extra cash for the health service and for social security benefits, and real terms increases in the education and justice budgets.

But the wellbeing economy, rural affairs and housing budgets have been cut.

Opposition politicians argue that had the SNP not wasted millions on failed projects it would have even more money to spend.

If you're just joining us here, the deputy first minister Shona Robison has set out the government's spending plans for the next year.

The 2023/24 budget has been described as the toughest since the creation of the Scottish Parliament in 1999.

Ms Robison, who is also the finance secretary, was charged with plugging an estimated £1.5bn hole in Scotland's books. Here are the key points from her speech.

• The Scottish government has increased taxes for the highest paid, with those earning more than £100,000 paying £3,000 more than those in the rest of the UK
• A new 45% tax band will be created for those earning between £75,000 and £125,140
• Shona Robison also announced a 1% increase to the highest rate of tax - for those earning more than £125,140 - to 48p in the pound.

• The government will "fully fund" a council tax freeze

• Business premises valued below £51,000 will have their rates frozen

• Councils will be given £1.5m to eliminate school meal debt for pupils across the country and free school meals will continue for primary 1 - 5 schoolchildren
• NHS boards will receive a 4.3% funding rise, an additional £550m and the health service budget will amount to £13.2bn as part of an "above real terms" rise
• The Scottish Police Authority resource budget will increase by £75.7m, while capital funding for Police Scotland to improve estate, fleet and technology will rise to £64.5m
• The Scottish Fire and Rescue Service is to receive an additional £13.5m for resource spending and extra funding of £10.3m to improve facilities
• Scottish Prison Service funding rises by 10% to £38.6m and £176m has been set aside to to modernise the prison estate

Stay tuned for more analysis and reaction to the government's announcement.

Image source, Getty Images

Shona Robison announced an uplift to the Child Payment from £25 to £26.70 per week.

But campaigners had expected a £5 uplift.

John Dickie from Child Poverty Action tells Radio Scotland's Drivetime he is “bitterly disappointed” for struggling families.

The first minister had said he wanted to see the Child Payment rise to £30 per week and he has failed to deliver on that, Mr Dickie says.

Mr Dickie points out the council tax freeze has very little benefit to lower income families and the Scottish government have not boosted the income of the hardest up.

The measures on free school meals did not go far enough, he adds, and they must happen sooner rather than later.

He welcomes the cancellation of school meal debt, but he wants to see the means test removed from free school meals.

Scotland gets more tax bandspublished at 16:16 Greenwich Mean Time 19 December 2023

16:16 GMT 19 December 2023

Lorna Gordon
BBC News Scotland correspondent

There will now be six income tax bands in Scotland.

That’s double the number in the rest of the UK.

Scotland will have starter, basic, intermediate, higher, advanced and top income tax bands.

While in England, Wales and Northern Ireland there are three income tax bands, set at 20% for basic rate taxpayers, a 40% higher rate and 45% additional rate which kicks in over £125,000.

Anyone earning over that amount in Scotland will pay 48p tax.

The 45% rate will kick in at £75,000 pounds here.

Scotland’s Finance Secretary Shona Robison said 51% of Scottish taxpayers will still pay less income tax than if they lived elsewhere in the UK.

She also said those with the broadest shoulders should contribute a little more.

On our BBC One Scotland programme Mairi Spowage, the director of the Fraser of Allander Institute, tells Andrew Kerr a lot of the headlines will be about the introduction of the advanced tax band.

Ms Spowage says the £75,000 at 45p band looks to the Scottish Fiscal Commission like it will raise £70m.

They also decided to put an extra penny on the top rate of tax and that will raise only £8m.

Ms Spowage explains the higher rate threshold will be frozen as well as the top rate threshold and the personal allowance.

More and more people will be dragged into tax, producing a significant amount of funding, known as fiscal drag.

Former SNP leadership candidate Ash Regan says the budget shortfall has been caused by the UK Tory government choosing to keep children in poverty and underfunding the NHS across the UK.

The Alba party MSP adds that the Conservatives choices are political, not economic.

"This funding model is not working for Scotland and securing independence is the only way out of this mess," she says.

"But I note in the 30 minute speech of the deputy first minister no mention was made of funding to advance the cause of Scottish independence."

She asks: "If spending reflects priorities, this government is not serious about independence - is it?"

Shona Robison says Ms Regan is right about the UK Tory government and that independence is required to get away from austerity budgets for good.