Protection for tax payers

99% to pay no more tax than last year.

The Scottish Government today confirmed that all income tax rates will be frozen next year and the higher rate threshold will remain unchanged at £43,000.

This threshold for paying higher rate income tax, which affects the top 10% of adults in Scotland, will generate an additional £29 million tax revenue.

The revised higher rate threshold forms part of an agreement with the Scottish Green party that secures the passage of the Scottish budget and Local Government Settlement.

It protects 99% of Scottish taxpayers who will pay no more than tax than they do in the current year.

Confirming the changes to parliament, as part of an agreement to pass the Scottish Government’s budget, Finance Secretary Derek MacKay said:

“In my discussions with the Scottish Green party I have made clear that at a time of economic uncertainty, rising inflation and rising prices, this government does not think it would be right to increase tax rates.

“No party in this parliament has a majority, however I believe it would not be right for there to be a fundamental change to the proposals we put to the people of Scotland.

“However having considered the proposals put to me, I confirm that I will lodge a Scottish Rate Resolution that sets the same tax rates as originally proposed but which applies a cash freeze on the higher rate threshold.

“This change protects basic rate taxpayers while generating an additional £29 million of revenues in 2017/18. And it ensures that 99% of taxpayers on the same income this financial year will not be paying any more income tax in the next financial year

“These proposals balance the need to raise additional revenues, whilst asking the highest earners to forego a significant tax cut at a time of UK Government austerity. For the 10% of people covered by this higher rate the income foregone amounts to around £7.70 a week.

“However, in return for this contribution Scottish taxpayers will continue to benefit from significant investment in our public services. This includes increased investment in the NHS, protection of public services that are free at the point of use – including free prescriptions, the support our policy of free personal care provides, free higher education, no business rates for 100,000 small businesses, as well as additional investment in reducing the attainment gap and the doubling of free childcare.”


The revised proposals which will be put to parliament in the coming weeks are:

Scottish Income Tax proposed rates and bands 2017-18


Scottish income tax rates

Scottish Bands

Scottish Basic rate 20%

Over £11,500* - £43,000

Scottish Higher rate 40%

Over £43,000 - £150,000

Scottish Additional Rate 45%

Over £150,000 and above**-

* Assumes you are in receipt of the Standard UK Personal Allowance

** Personal Allowance reduced by £1 for every £2 earned over £100,000


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