Image source, bbc

That's all from Holyrood Live on Wednesday 12 December 2018, the day Finance Secretary Derek Mackay published his draft budget.

Scotland's finance secretary has said he will not pass on a tax break for higher earners that was announced by the Chancellor in his UK budget.

Derek Mackay said "now is not the time" to cut taxes for higher earners as he unveiled his Scottish budget.

It means the gap between top rate taxpayers in Scotland has widened compared to the rest of the UK.

But Mr Mackay said most people would continue to pay less in Scotland than south of the border.

He also pledged extra funding for education, the health service, local government and infrastructure as has set out his plans for tax and spending for the next year at Holyrood.

The Conservatives claimed that higher earners were "being punished in the SNP's Scotland," with people earning £50,000 in Scotland paying about £1,500 more a year than their counterparts south of the border.

• Scottish budget negotiations stall
• Read more here

Image source, bbc

Use our Budget calculator, developed by Deloitte, external, to find out how your pocket may be affected by the latest tax measures.

If you live in Scotland, the Scottish Parliament now sets income tax rates and bands apart from the personal allowance. The UK Parliament continues to be responsible for national insurance, fuel, alcohol and cigarette duty.

Some changes will not be seen until future financial years and are not included in this calculator. The Scottish budget is a draft proposal and still has to be agreed by MSPs.

Click here for the budget calculator.

Scotland's finance secretary will not pass on a tax break for higher earners that was announced by the chancellor in his UK budget.

Image source, Scottish Parlaiment

The SNP is a minority administration, so Mr Mackay needs some help to get his plans through the final vote, which should take place next February.

The Scottish Greens have been his partners for the past two years but they are making threatening noises this year by saying they won't even enter formal negotiations until they see movement towards major reform of local government funding.

• Scottish budget negotiations stall

The Lib Dems, who are normally at least in the conversation, have pulled out of talks altogether after their demand that the SNP step away from any plans for a new independence referendum. For similar constitutional reasons, a deal with Labour or the Conservatives looks vanishingly unlikely.

This leaves the Greens in a strong position to make demands - and they have set their sights on scrapping the council tax in favour of "a fairer system that protects services and cuts inequality".

What can Mr Mackay do to provide the "meaningful progress" on this front that Patrick Harvie is looking for? Will the tourist tax be enough, or is he going to have to move further?

Expect the real horse-trading to begin in earnest between this announcement and the first votes on the budget bill in the new year.

Image source, bbc

The independent economic forecaster, the Scottish Fiscal Commission, has produced forecasts on economic growth, external for the coming years and is predicting economic growth of 1.4% this year and 1.2% in 2019, which it says reflects "stronger recent economic performance, a more positive prospect for earnings over the next few years".

The Commission forecasts that £15.2bn of the Scottish Budget will be raised by devolved taxes in 2019-20. Income tax raises the most revenue, forecast to be £11.7bn in the next financial year.

Image source, Getty Images

Health was the big winner with the Scottish Government proposing an increase of almost £730m in health and care services, with much of the money being passed on in so-called "Barnett consequentials" from Westminster as a result of spending commitments by the UK government south of the border.

Education spending saw a real-terms increase including a £180m pot to raise standards in schools. Almost £500m has also been committed to aid the expansion of the early learning and childcare sector.

Support for business comes in the shape of £5bn commitment for capital investment to be spent on modernising Scotland's infrastructure, including a new £50m fund for regenerating run down high streets. Initial funding of £130 million towards the establishment of a Scottish National Investment Bank has also been earmarked.

Image source, Getty Images

Public sector payincreases of 3% for those earning up to £36,500 have also been proposed, while those who earn between £36,500 and £80,000 will see their wages increase by 2%. Separate to the draft budget, it has been announced that MSPs will receive a 2.3% increase taking their salaries to £63,579.

Mr Mackay also said Scotland's 32local councilswill receive a real terms increase in both revenue and capital funding, taking the local government budget to £11.1bn.

The Scottish government has also committed more cash to the £2.9bnjusticebudget, claiming the police resource budget will be protected in real terms.

Income tax- a new five-band regime came into force earlier this year and the finance secretary has decided to maintain the current rates.

He will increase the starter and basic rate thresholds by inflation in a move designed to help the lowest paid.

However, the Scottish higher rate threshold has been frozen - unlike in the rest of the UK where the threshold will go up to £50,000 from April next year - which Mr Mackay said would raise an extra £68m in revenue.

The move means the divergence between the income tax regime in Scotland and the rest of the UK continues to grow.

Image source, bbc

Other taxes

Elsewhere, the replacement system for stamp duty in Scotland (Land and Buildings Transaction Tax) is also being revamped with the amount that buy-to-let investors or holiday home buyers pay on a second residential purchase going up from 3% to 4%.

The Scottish government's Small Business Bonus Scheme is maintained, while the non-domestic poundage rates paid by businesses will see a" below-inflation increase".

Local authorities will once again be allowed to increase council tax levels by up to 3%.

According to the Scottish Parliament this is the first year that the new budget process applies, here’s a quick overview explainer of the committee / chamber process...

Now the Scottish government has published the Scottish budget, which will include a summary of how the Parliament’s committees have influenced the formulation of the budget.

Ministers will now provide a more detailed response to individual committees’ pre budget reports within five sitting days from the publication of the Budget.

Each committee will then have the opportunity to hear oral evidence from their respective ministers on the detailed response.

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Committees and individual members will have the opportunity to propose alternative revenue and spending proposals through reasoned amendments to the Scottish government motion on the general principles of the Bill.

If ministers do not intend to lodge formal amendments to reflect any reasoned amendments agreed by the Scottish Parliament at Stage 1 then they must provide a written explanation to the Finance and Constitution Committee in advance of Stage 2.

Prior to the Stage 1 debate on the Budget Bill, there will be a debate in the Chamber on the committee pre-budget reports and the response of Ministers in the Budget.

The debate will be led by the Finance and Constitution Committee and time will be provided during the debate for each relevant convener to set out how their committee has sought to influence the budget and to allow the Government an opportunity to respond.

This debate will take place on 24 January 2019.

The Stage 1 Debate on the Budget Bill will take place w/c 28 January 2019.

Use our Budget calculator to find out how your pocket may be affected by the latest tax measures.

Image source, Andrew Cowan

Scotland's finance secretary has said he will not pass on a tax break for higher earners that was announced by the Chancellor in his UK budget.

Derek Mackay said "now is not the time" to cut taxes for higher earners as he unveiled his Scottish budget.

It means the gap between top rate tax payers in Scotland has widened compared to the rest of the UK.

But Mr Mackay said most people would continue to pay less in Scotland than south of the border.

He also pledged extra funding for education, the health service, local government and infrastructure as has set out his plans for tax and spending for the next year at Holyrood.

The Conservatives claimed that higher earners were "being punished in the SNP's Scotland," with people earning £50,000 in Scotland paying about £1,500 more a year than their counterparts south of the border.

• Scottish budget negotiations stall
• Read more here

A spokesman for the universities and colleges union, the UCU, said: "This is a deeply disappointing budget for Scottish higher education. Today's real terms cut to the sector's funding will ultimately hit students the hardest. If we value our universities and the teaching, knowledge exchange and research they provide, then we needed a funding settlement to match the politicians' warm words."

Mike Kirby, Unison's Scotland secretary, said: "Today's Scottish government budget fails to make the investment in public services that our country needs. The Scottish government should have taken advantage of their tax powers to maintain essential public services. Instead they have further cut business tax and maintained the failed small business bonus scheme. The rise in local government funding is less than both Cosla and Audit Scotland say is necessary to maintain vital public services."

Image source, Andrew Cowan

Finance Secretary Derek Mackay set out his tax and spending plans for the next financial year.

Mr MacKay said his budget would protect Scotland from the worst effects of Brexit, but critics said it had ignored business pleas not to increase the income tax gap between Scotland and the rest of the UK.

He said his budget would invest record sums in the health service, there's extra money for childcare, and education funding is protected.

Also announced were a real terms cut in business rates, more affordable homes and extra apprenticeship places.

On tax, lower income thresholds will increase by inflation, while higher thresholds will be frozen.

The finance secretary says that means 99% of taxpayers will pay less tax than they do on their current income.

But the Conservatives complained that the increased tax gap with England would damage business growth, and Labour argued the budget doesn't do enough to help children in poverty.

MSPs will vote on the plans at the end of January.