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Income tax rates set

Published: 21 Feb 2017 17:48
Part of:
Economy

Historic Scottish Rate Resolution passed by Parliament.

For the first time in the history of the Scottish Parliament, MSPs have passed measures setting all income tax rates and bands as proposed by the Scottish Government in this year’s Budget Bill.

From April 6th this year, rates will be frozen and the threshold at which people start paying the higher tax rate will remain at £43,000.

Finance Secretary Derek Mackay said:

“This is a historic day for Scotland – the first time ever that rates and bands of income tax are being set by the Scottish Parliament in line with Scotland’s needs and priorities.

“But the passing of the Scottish Rate Resolution is much more about our future than it is about our history.

“This represents the best deal on tax and public services anywhere in the UK – increasing investment in the NHS and helping protect free prescriptions, free personal care for the elderly, mitigation of the bedroom tax and free higher education.”

Background

The proposals Parliament has passed are:

Scottish Income Tax proposed rates and bands 2017-18

Scottish income tax rate

Scottish Bands

Scottish Basic rate 20%

Over £11,500* - £43,000

Scottish Higher rate 40%

Over £43,000 - £150,000

Scottish Additional Rate 45%

Over £150,000 and above**-

* Assumes you are in receipt of the Standard UK Personal Allowance

** Personal Allowance reduced by £1 for every £2 earned over £100,000