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Death and Taxes - Scottish taxes!

23/02/2018 by Webmaster

The Scottish Parliament has confirmed the income tax rates that apply to Scottish taxpayers from 6 April 2018.

Scottish income tax rates 2018/19

Scottish income tax bands 2018/19

Scottish starter rate – 19%

£11,851 - £13,850 (£2,000)

Scottish basic rate – 20%

£13,851 - £24,000 (£10,150)

Scottish intermediate rate – 21%

£24,001 - £43,430 (£19,430)

Scottish higher rate – 41%

£43,431 - £150,000

Scottish top rate – 46%

£150,001 and above

 These rates and bands apply only to the “non-savings” and “non-dividend” income of Scottish taxpayers.

If your home is in Scotland for more than half of a tax year, you are a Scottish taxpayer. As a result, these apply to profits from rental property or earned income, such as employment income, pension income and profits from self-employment.

Scottish taxpayers will continue to pay income tax on their savings and dividend income at the UK rates.

So the basic rate band is effectively split in three – the starter, basic and intermediate rate bands.  The additional rate band is renamed the top rate band. And the higher and top rates each increase by one percentage point, to 41% and 46% respectively.

As in 2017/18, there is a difference in the higher rate threshold in Scotland – the point at which individuals start to pay higher rate tax. If we assume that you are eligible for the personal allowance (£11,850 in 2018/19) and have only employment income, if you are a Scottish taxpayer, your higher rate threshold will be £43,430 for 2018/19; whereas if you are a UK taxpayer, your higher rate threshold will be £46,350.

Itinerant people take care. Update the address HMRC hold.  Make sure your Scottish tax code begins with an “S”.  Tax software is great, but not only will we have to wait longer for the software providers to cope with these changes and issue the new compliant versions, but it also gives me a headache just thinking about trying to check the results manually! Who needs a computer, eh?

In this world nothing can be said to be certain, except death and taxes.” Said Benjamin Franklin.  But the more complicated taxes get, the harder it is to arrive at an exact amount of which we are all certain.

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