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Changes to Scottish Income Tax rates

Know more about the recent changes introduced to the Income tax rates and bands for Scottish tax payers and how it will impact your clients.

What’s changing?

On 14 December 2017 the Scottish Government announced new Income Tax rates and allowances for Scottish taxpayers to apply for the 2018/2019 tax year.

The following tax bands for people who live in Scotland will be:

  • Starter rate
  • Basic rate
  • Intermediate rate
  • Higher rate
  • Top rate

These rates and allowances are different to the rates and allowances for the rest of the UK.

What are the new Income Tax rates?

For the tax year 2018/2019, the new rates are as follows:

Income Tax band Earnings bracket New tax rate in Scotland
Starter rate £11,850 - £13,850

19%

Basic rate £13,851 - £24,000

20%

Intermediate rate £24,001 - £43,430

21%

Higher rate £43,431 - £150,000

41%

Top rate £150,001+

46%

The tax bands shown assume that your client is in receipt of the full personal allowance. For every £2 of income over £100,000, this allowance is reduced by £1.

The Scottish Parliament agreed these rates and thresholds on 20 February 2018, and they apply from 6 April 2018.

FAQs

Who’ll be affected?
How will I know if my client is a Scottish income taxpayer?
What does this mean for your client's pension tax relief?
Are there any exceptions to this?

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