Changes to Scottish Income Tax for 2022 to 2023: factsheet

Income Tax Policy Proposal: Scottish Budget 2022-23

• The Starter and Basic Rate bands will increase by inflation.
• The Higher and Top Rate thresholds will remain frozen in cash terms at £43,662 and £150,000, respectively.
• We propose no changes in rates.
• The UK Government confirmed in the 2021 Autumn Budget that the UK-wide Personal Allowance will remain frozen at £12,570.
• The Scottish Fiscal Commission have forecast that Income Tax will raise £13,671 million in 2022-23 in Scotland.

*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.

• Non-taxpayers: 1,866,000 (41%);
• Starter rate: 275,000 (6%);
• Basic rate: 1,111,000 (24%);
• Intermediate rate: 835,000 (18%);
• Higher rate: 453,000 (10%); and
• Top rate: 20,000 (less than 1%).

Impact on individual taxpayers of changes to Scottish Income Tax

• Those earning less than £27,850 – which is 54% of Scottish taxpayers (1.5 million people) - will pay slightly less Income Tax in 2022-23 than if they lived elsewhere in the UK.
• No taxpayer will pay more Scottish Income Tax in 2022-23 than they did in 2021-22 on their current income.

The table below compares the change in take home pay for individuals earning different levels of income. Two different comparisons are provided:

• The second column sets out the impact of the proposed changes to Scottish Income Tax in 2022-23, compared to 2021-22;
• The third column sets out the difference in Scottish Income Tax payments compared to the rest of the UK in 2022-23.