Fiscal drag information: FOI release

Information requested

When did the income tax thresholds last keep up with inflation?

Can you give me a financial breakdown for the last 10 years of inflation rate vs taxation percentage and threshold value?

Response

I enclose a copy of the information you requested in relation to part two of your request.

Regarding part one of you request, the answer is set out below. Please note Scottish Income Tax was only introduced in 2017-18. There have been no years when all tax thresholds have been uprated in line with inflation. The information below sets out instances of individual thresholds being uprated by at least inflation since 2017-18.

Changes to the Personal Allowance have been included in the list below. Policy relating to the Personal Allowance is reserved. This means any changes made by the UK Government to this aspect of the Income Tax system apply to taxpayers in Scotland.

• In 2017-18, the Personal Allowance increased by 4.5%, compared to CPI inflation of 1%.
• In 2018-19 the Personal Allowance increased by 3%, matching CPI inflation of 3%.
• In 2019-20 the Personal Allowance increased by 5.5%, the Basic rate threshold increased by 4.7% and the Intermediate rate threshold increased by 3.9% compared to CPI inflation of 2.4%.
• In 2021-22 the Personal Allowance and Basic rate thresholds increased by 0.6%. The Intermediate and Higher rate thresholds increased by 0.5% compared to CPI inflation of 0.5%.
• In the 2025-26, the Basic and Intermediate rate thresholds were increased by 3.5% compared to CPI inflation of 1.7%.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at https://www.gov.scot/foi-responses.

FOI 202500452588 - Information released - Annex

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