SNP/Green Budget Deal Passed by ParliamentFebruary 23, 2018
The bill was passed in Scotland on 20 February 2018 which keeps Scotland as the highest-taxed part of the UK for the 2018/19 tax year.
The changes introduce a new 19% band for lower earners, a 20% band for earnings between £13,850 and £24,000 and a 21% band for earnings between £24,000 and £43,430.
Additionally, an extra 1% has been added to both the higher and additional rates, increasing them to 41% and 46% respectively. Mr Mackay also established a stealth tax by increasing the £43,000 higher rate threshold by only 1% instead of inflation.
This budget means that Scots earning above £26,000 will have more tax to pay than if they lived elsewhere in the UK. It has also drawn criticism for the increased complexity of having 5 rate bands, in addition to rates applicable to savings income that are still set by Westminster.
Rates and bands for 2018/19
*Assumes individuals are in receipt of the Standard UK Personal Allowance
**Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
To discuss any of the issues highlighted within this article, or any other matter you require our help with, please contact any member of our tax team.
Alan Davis – Partner & Chairman
Dougy Agnew – Partner
Barbara McQuillan – Partner