What is Scottish Income Tax?

Income tax is the responsibility of the UK Government, however, the Scotland Act 2012 gave the Scottish Parliament the power to set a different rate of income tax in Scotland.

The Scotland Act 2016 extended these powers, enabling the Scottish Parliament to set the tax band thresholds (excluding the personal allowance) as well as the rates.

In Scotland there are five income tax rates and bands, with a starter rate (19 per cent), basic rate (20 per cent), intermediate rate (21 per cent), higher rate (41 per cent) and top rate (46 per cent).

Scotland has the fairest income tax anywhere in the UK, with 55 per cent of taxpayers paying less in Scotland than they would elsewhere in the UK.

At the same income, 99 per cent of income taxpayers in Scotland will pay the same or less than last year with the Starter and Basic rate bands increasing with inflation.

Against the backdrop of austerity and a real terms reduction to the total Scottish budget, our tax system this year alone will mean we have an additional £68 million to invest in protecting our cherished public services.

This funding will support increased investment in our hospitals, schools and businesses. It will also ensure that taxpayers in Scotland continue to get the best deal anywhere in the UK, with free medicine, free university and a transformative expansion of childcare. Read more about what’s in the budget here.