Business News

Scotland Freezes Higher-Rate Threshold

Higher earners in Scotland are poised to pay significantly more in income tax next year, after the higher-rate threshold was frozen for 2019/20.

Delivering Draft Budget on 12 December 2018, Finance Secretary Derek Mackay opted to keep the higher-rate threshold at £43,430 while raising the starter and basic rates in line with inflation.

Chancellor Philip Hammond announced plans in Budget 2018 to raise the higher-rate threshold to £50,000 in the rest of the UK from 6 April 2019.

Steven Cameron, pensions director at Aegon, said:

“Someone earning £50,000 in England, Wales or Northern Ireland would pay £7,500 in income tax from 2019/20, while someone earning the same figure in Scotland would pay £9,044 which is £1,544 a year more or £128 a month extra.

“This is a significant sum and will increase pressure on the Scottish Government to demonstrate what extra services Scottish taxpayers are receiving for the difference.”

The thresholds are subject to change as they need to be rubber-stamped by Holyrood in February 2019. 

Income tax rates and bands in Scotland (2019/20)
Scottish bandsTaxable income 2019/20Rate 
Personal allowanceUp to £12,5000% 
Starter rate£12,500 to £14,549 19%
Basic rate£14,549 to £24,94420% 
Intermediate rate £24,944 to £44,43021% 
Higher rate£44,430 to £150,000*41% 
Top rateAbove £150,000*46% 

*Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 earned over £100,000.

For any help or advice with financial planning talk to RPD

Show More

Floors Magazine brings you daily flooring news, features, tenders, events, jobs and everything in-between.

Related Articles