Scottish Income Tax rate queries: FOI release

Information requested

You asked for information on Scottish Income Tax Policy decisions relating to earnings between £43,663 and £50,270.

Response

The answer to your questions, in order of your request are:-

1. The Scottish Income Tax rate between £43,663 and £50,270 is 42%, the Income Tax rate for the rest of the UK for this income level is 20%.

In addition, all employees across the UK earning between £12,576 & £50,268 will pay 8% National Insurance. Decisions on National Insurance rates and bands remain reserved to the UK Parliament.

2. The difference between the Scottish Income Tax and the rest of the UK higher rate tax band is due to divergence of the tax regimes over a number of years and not directly linked to one single budget decision.

At each budget the Scottish Government publishes a Scottish Income Tax Factsheet, this factsheet summarises the changes made each year and sets out the differences between the Scottish Income Tax and rest of UK Tax rates.

All of the information you have requested is available from Scottish Budget 2025-26 - gov.scot, Scottish Budget 2024-25 - gov.scot, Previous Budgets

Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. If, however, you do not have internet access to obtain this information from the website(s) listed, then please contact me again and I will send you a paper copy.

3. The Scottish Government has published several policy papers on changes to Income Tax over these periods:

• On 2nd November 2017, the Scottish Government published a paper that aimed to provide a background on the use of the income tax powers devolved to the Scottish Parliament. The Role of Income Tax in Scotland’s Budget
• On February 2020, the Scottish Government published a paper examining the evidence base on taxpayers’ behavioural responses to income tax changes across the income spectrum. Scottish+Budget+2020-2021+- +understanding+the+behavioural+effects+from+income+tax+changes.pdf
• On 16 December 2021, the Scottish Government published a Framework for Tax which set out the principles and strategic objectives that underpin the Scottish Approach to Taxation, as well as Scottish Governments approach to decision making, engagement and how we manage and sequence tax policy and delivery. Supporting documents - Framework for Tax 2021 - gov.scot
• On 16 December 2021, the Scottish Government published a policy evaluation of the Scottish Income Tax changes made in 2018-19. Scottish Income Tax: 2018-19 policy evaluation

HMRC have also published three pieces of research reports on Scottish Income Tax commissioned by the Scottish Government:

• Estimating Scottish taxpayer behaviour in response to Scottish Income Tax changes introduced in 2018 to 2019: Estimating Scottish taxpayer behaviour in response to Scottish Income Tax changes introduced in 2018 to 2019 - GOV.UK
• Intra-UK migration of individuals between Scotland & rUK: movements in numbers and income: Intra-UK migration of individuals: movements in numbers and income - GOV.UK
• Labour market participation and intra-UK cross-border migration of Scottish taxpayers:

Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. If, however, you do not have internet access to obtain this information from the website(s) listed, then please contact me again and I will send you a paper copy.

4. On 4th December 2024, the Scottish Government published a Tax Strategy which sets out the next steps in the evolution of the tax landscape in Scotland, expanding on our framework for tax published on 16 December 2021 (link above). Supporting documents - Scotland's Tax Strategy: Building on our Tax Principles - gov.scot

As part of this Tax Strategy and the Scottish Government’s Corporate Evaluation Action Plan published in August 2024 scottish-government-evaluation-action-plan.pdf. There is a clear commitment to evaluate significant tax policy decisions to assess impacts and to strengthen future decision making.

These will be published in due course.

Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. If, however, you do not have internet access to obtain this information from the website(s) listed, then please contact me again and I will send you a paper copy.

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.