Scottish Income Tax 2023-24: factsheet
A factsheet on the changes made to Scottish Income Tax for 2023 to 2024.
This document is part of a collection
Income Tax Policy Proposal: Scottish Budget 2023-24
- Maintain the Starter and Basic Rate bands at the same level, in cash terms, as 2022-23.
- No changes to the Starter, Basic and Intermediate Rates.
- Maintain the Higher Rate threshold at the same level, in cash terms, as 2022-23.
- Reduce the Top Rate threshold from £150,000 to £125,140.
- Add 1 pence to the Higher and Top Rates of tax to 42 pence and 47 pence respectively.
- The UK Government confirmed in the 2022 Autumn Statement that the UK-wide Personal Allowance will remain frozen at £12,570.
- The Scottish Fiscal Commission have forecast that Income Tax will raise £15,810 million in 2023-24 in Scotland.
Proposed Income Tax Rates and Bands
|Starter||£12,571* - £14,732||19%||£12,571* - £14,732||19%|
|Basic||£14,733 - £25,688||20%||£14,733 - £25,688||20%|
|Intermediate||£25,689 - £43,662||
|£25,689 - £43,662||21%|
|Higher||£43,663 - £150,000**||41%||£43,663 - £125,140**||42%|
|Top||Above £150,000||46%||Above £125,140||47%|
*Assumes individuals are in receipt of the standard Personal Allowance.
**Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
Expected number and proportion of Scottish taxpayers by marginal tax rate, 2023-24
Impact on individual taxpayers of changes to Scottish Income Tax
- 39% of Scottish adults (1.8 million individuals) are not affected by the 2023-24 policy changes as their income is below the UK-wide Personal Allowance.
- The policy changes also have no effect on the lowest earning 9% of taxpayers (or 5% of adults) who earn less than £14,732 (and pay the 19p Starter Rate).
- Those earning less than £27,850 – which is 52% of Scottish taxpayers (1.47 million people) - will continue to pay slightly less Income Tax in 2023-24 than if they lived elsewhere in the UK.
The table below compares the impact on take home pay for individuals earning different levels of income. Three different comparisons are provided:
- The second column sets out the impact of the proposed changes to Scottish Income Tax in 2023-24, compared to 2022-23, assuming no change in their income;
- For example, a Scottish taxpayer earning £50,000 will see a £63 reduction in their take home pay in 2023-24 compared with 2022-23.
- The third column sets out the difference in take home pay resulting from Scottish Income Tax policy compared to the rest of the UK in 2023-24.
- The fourth column shows the impact on take home pay in 2023-24, compared to a baseline where all thresholds and bands are increased in line with inflation, bar the Top Rate Threshold which would be frozen at £150k. This provides a truer real terms measure of the changes that income taxpayers will experience in their income tax contributions.
|Example income||Impact on Take Home Pay|
|Impact of changes in 2023-24 compared to 2022-23||Position relative to the rest of the UK in 2023-24||Impact of changes in 2023-24 compared to inflationary uprating in 2023-24|
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