Scottish Income Tax – Additional Tax Bracket
The Scottish Parliament has made Scottish income tax a little more complex again by introducing a new rate. This new rate applies to non-savings, non-dividend income but the Personal Allowance is not affected as this is set by the UK Government.
The new rate is known as the Advanced Rate and slots in between the higher rate and the top rate. This gives Scottish tax payers now six different bands they could be affected by although numbers will be low as the top bands are approached.
From April 2024 the Personal Allowance is £12 570, so assuming this remains and the individual has an S1257L tax code the bands will be as follows:
| Band | Band Name | Rate |
|---|---|---|
| £12 571 – £14 876 | Starter Rate | 19% |
| £14 877 – £26 561 | Scottish Basic Rate | 20% |
| £26 562 – £43 662 | Intermediate Rate | 21% |
| £43 663 – £75 000 | Higher Rate | 42% |
| £75 001 – £125 140 | Advanced Rate | 45% |
| Above £125 140 | Top Rate | 48% |
England, Northern Ireland and Wales will remain with three tax brackets so assuming a 1257L or C1257L tax code:
| Band | Band Name | Rate |
|---|---|---|
| £12,571 – £50,270 | Basic Rate | 20% |
| £50,271 – £125,140 | Higher Rate | 40% |
| Above £125,140 | Additional / Top Rate | 45% |
There could be further changes after the UK Government’s Spring Budget on the 6th March but the above is our expectation.