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9am Lowdown: Holyrood holds historic tax vote

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21st Feb 2017
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Good morning and welcome to the 9am Lowdown which today features business rates, Scottish tax and pension generosity.

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Holyrood to hold historic tax vote

Holyrood will today vote to set separate Scottish income tax rates and bands for the first time.

The SNP and Greens have agreed a deal which will see the basic rate paid by most taxpayers left alone, but the threshold for paying the 40p rate will start at £43,000 in Scotland instead of £45,000.

According to the BBC finance secretary Derek Mackay is also due to announce further support to help firms deal with business rate changes. Mackay is expected to use a proposed parliamentary statement to outline a further package of support.

The minority SNP administration had planned to raise the threshold for the 40p rate only in line with inflation, but in striking a deal with the Scottish Greens to get its budget plans through parliament, the proposed rise was scrapped and the threshold was instead frozen at £43,000.

The income tax debate and vote starts from 2:50pm.

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Hammond listening to business rates concerns

Chancellor Philip Hammond has indicated that he is prepared to take measures in the Budget next month to help those worst affected by the business rates rise.

Hammond told Conservative MPs he was aware of the impact the changes will have on high street shops and was open about ways to help.

A Treasury source told The Telegraph: “He’s open to listening to the issues of those who are hardest hit, but there was no decision either way.”

The Chancellor also indicated he wants more reform of the system in future to make sure online retailers do not benefit to the detriment of the high street.

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Firms could reduce pension generosity

The government has suggested that firms in financial trouble could be allowed to reduce the generosity of pensions.

As part of a discussion paper on the future of defined benefit (DB) pensions, it said financially stressed companies (about 5% of businesses) might be allowed to water down previous promises.

According to a BBC report some companies might be allowed to adjust the way they up-rate pension payments annually to compensate for inflation.

Instead of using the Retail Prices Index (RPI) it could be that some companies would be allowed to use the Consumer Prices Index (CPI) instead to save money.

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