Scottish income tax has become more complex in 2023, with new bands and rates introduced.
In this article, we break down the differences between Scotland and the rest of the UK, and what it could mean for you.
BREAKING NEWS (19/12/2023)! Scotland will now have 7 distinct rates or bands of tax whereas the rest of the UK will still have 4. Could this get any more confusing?
Basically, in the Rest of the UK (R.UK) there are 4 income tax rates as follows:
| Income | Rate | Name |
| Up to £12,570 | 0% | Personal Allowance |
| £12,571 to £50,270 | 20% | Basic rate |
| £50,271 to £125,140 | 40% | Higher rate |
| Over £125,140 | 45% | Additional rate |
Whereas Scotland has 6 thus:
| Income | Rate | Name |
| Up to £12,570 | 0% | Personal Allowance |
| £12,571 to £14,732 | 19% | Starter rate |
| £14,733 to £25,688 | 20% | Basic rate |
| £25,689 to £43,662 | 21% | Intermediate rate |
| £43,663 to £150,000 | 41% | Higher rate |
| Over £150,000 | 46% | Additional rate |
Now if that wasn’t complicated enough, Scotland have today (19/12/2023) announced a new “advanced rate” of 45% from £75,000 of income meaning it will have 7 rates of tax.
We do have some Scottish clients so will be working this through and understanding how this affects them.
This added complexity makes tax planning even more important for Scottish taxpayers.
With more tax bands and increasing complexity, understanding your position is more important than ever.
If you’re affected by Scottish income tax, reviewing your plan could help you avoid unnecessary tax and make more informed financial decisions.
You may also like to read our article: The rise of the tax-traps
Or You may be one of the people who paid tax but could have avoided it!