Setting rates of Income Tax is now the responsibility of the Scottish Parliament. To support our economy and invest in our public services against the the impact of continued UK austerity, the Scottish Government has produced a Draft Budget which sets a new income tax policy for Scotland.
The Scottish budget will ensure that 7 out of 10 income tax payers in Scotland pay less tax next year, including everyone earning less than £33,000. And most Scots will pay less tax than if they lived in rest of the UK.
By lowering the Starter Rate of tax and increasing the Top Rate of tax, not only will we make Scotland the fairest taxed part of the UK – we will raise an additional £164 million for investment in schools, hospitals and economy.
We will freeze the Basic Rate of income tax and introduce a new 19p Starter Rate of income tax to protect the lowest earners. In order to make the tax system more progressive, we will introduce a new Intermediate Rate of 21p which will increase in line with inflation only. We will increase both Higher Rate and Top Rate by 1p respectively.
We are also committed to increasing the amount of income exempt from Income Tax to £12,750 by the end of the current Scottish Parliament.