Starting April 6, 2018, Scotland's new tax rates and brackets will differ greatly from other parts of the UK. Furthermore, the amount of income tax paid by the residents of Scotland will continue to diverge from the UK in the coming years. The start of the new financial year marks the creation of two new income tax bands by the Scottish Government after the plans were approved by the Members of Scottish Parliament.
One of the changes is a lowering of the higher rate threshold from £44,273 to £43,430. From April, taxpayers in this bracket will be subject to a new 41p rate, higher than the 40p paid by those in other parts of the UK.
If you make more than £100,000 a year, your personal allowance goes down by £1 for every £2 you make.So, if you earn £101,000 a year, your tax-free personal allowance would go down by £250, making it £11,600.
Here are the 2017/18 tax rates for Scotland
Let’s say you make £43,000 a year. You have no other income.In 2017/18, your first £11,500 would be tax-free. And you’d pay tax at 20 percent on the remaining £31,500. This means your tax bill would amount to £6,300.In 2018/19, your situation would be slightly more complicated:
And those are Scotland's main income tax changes you should know about for the 2018/19 tax year.Did you get everything?Here’s to hoping you pay less tax in 2018/19.