New income tax rates for people in Scotland due to start from April

Scotland has six tax bands while England and Wales have four.
New income tax rates for people in Scotland due to start from April

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The Scottish Government recently confirmed that income tax rates north of the border will be frozen until at least the end of this Parliament in 2026. During the Budget in December, Finance Secretary Shona Robison also announced that the basic and intermediate rate thresholds will be frozen, effectively pulling more Scots workers into lower tax bands.

The SNP has introduced additional tax bands since 2017 and Ms Robison said the decision to freeze rates means that the majority of people in Scotland will pay less income tax than those in the rest of the UK. However, people in Scotland begin paying more in tax after earning more than £28,800 a year and the difference in thresholds with England, Wales and Northern Ireland increases significantly on earnings of more than £50,000 a year.

That, alongside the freezing of tax thresholds, saw the levels of tax between Scotland and the rest of the UK diverge significantly.

If confirmed by MSPs next month, the changes in the Budget for 2025/26 mean the basic and intermediate rate thresholds will increase by 3.5 per cent to £15,397 and £27,491 respectively.

The higher, advanced and top rate thresholds will be maintained at £43,662, £75,000 and £125,140 respectively.

The Finance Secretary said her tax plans will provide certainty to workers across Scotland. She told MSPs at the time: “I have decided to provide tax support for low and medium-income earners. The basic and intermediate rate thresholds will increase this year by 3.5%, effectively twice the rate of inflation.

“That means more of people’s money will be taxed at the starter and basic rates. It also means that the majority of taxpayers in Scotland will continue to pay less income tax than in the rest of the UK.

“This will remain true until at least the end of this Parliament while, as with the UK, thresholds for higher, advanced and top rates will be maintained at their current levels.”

Ms Robison said decisions to increase tax among middle and high earners means that Scotland will see an additional £1.7 billion in its budget.

She added: “Setting out our plans now for the rest of this Parliament will provide certainty, allowing taxpayers to better manage their finances and businesses to plan and make investment decisions with confidence.”

UK Government UpdatesScottish income tax thresholds

The table below shows the 2024/25 Scottish Income Tax rates you pay in each band if you have a standard Personal Allowance of £12,570. You do not get a Personal Allowance if you earn over £125,140.

2024/25

Taxable Income

Scottish Tax Rate

Personal Allowance

Up to £12,570

0%

Starter rate

£12,571 to £14,876 (rising to £15,397)

19%

Basic rate

£14,877 to £26,561 (rising to £27,491)

20%

Intermediate rate

£26,562 to £43,662

21%

Higher rate

£43,663 to £75,000

42%

Advanced rate

£75,001 to £125,140

45%

Top rate

over £125,140

48%

Tax thresholds in England and Wales 2024/252024/25 Taxable Income UK Tax Rate

Personal Allowance

Up to £12,570

0% Basic Rate

£12,571 to £50,270

20% Higher Rate £50,271 to £125,140 40% Additional Rate Over £125,140 45%

Darwin Friend, head of research of the TaxPayers’ Alliance, said: “Taxpayers across Scotland will warmly welcome the lifting of tax thresholds, even if this won’t benefit all Scots.

“But with this budget also including a dazzling array of spending pledges, there will rightly be concern about the impact of the fiscal measures on the already fragile public finances.

“Scottish ministers need to ensure that this spending binge is accompanied with meaningful reform of public services.”

MSPs will vote on the Budget proposals in February. If passed, the changes will be implemented for the start of the 2025/26 financial year on April 6, 2025.

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