Scottish Income Tax 2023-24: factsheet
A factsheet on the changes made to Scottish Income Tax for 2023 to 2024.
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
2022-23 | 2023-24 | |||
---|---|---|---|---|
Band | Rate | Band | Rate | |
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 | 21% |
£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.[1] 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 | |
£15,000 | £0 | £22 | -£2 |
£17,000 | £0 | £22 | -£2 |
£19,000 | £0 | £22 | -£2 |
£20,000 | £0 | £22 | -£2 |
£30,000 | £0 | -£22 | -£15 |
£40,000 | £0 | -£122 | -£15 |
£45,000 | -£13 | -£452 | -£296 |
£50,000 | -£63 | -£1,552 | -£961 |
£60,000 | -£163 | -£1,806 | -£1,061 |
£100,000 | -£563 | -£2,606 | -£1,461 |
£120,000 | -£863 | -£3,206 | -£1,761 |
£150,000 | -£2,432 | -£3,858 | -£3,330 |
£160,000 | -£2,532 | -£4,058 | -£3,430 |
Contact
Email: ellis.reilly@gov.scot
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