Scottish Budget: Higher earners to pay more income tax

Higher earners in Scotland are to pay more income tax.

A new 45% band will be introduced for people earning between £75,000 and £125,140 – meaning they will pay more tax than they currently do.

The top rate of tax, paid by those earning more than £125,000, will also rise from 47% to 48%.

Finance Secretary Shona Robison confirmed the move as she unveiled the government’s budget for next year.

The changes mean Scotland will have six income tax bands while the rest of the UK has three, with higher earners in Scotland paying more than other parts of the country.

They are designed to help plug a £1.5bn funding shortfall in the Scottish budget alongside a series of spending cuts, with Ms Robison saying they would raise an additional £80m.

The finance secretary also confirmed the current thresholds for the higher and top bands – £43,663 and £125,140 respectively – would be frozen instead of rising with inflation.

She said this would generate an extra £307m through more people finding themselves in higher tax bands after being given pay rises.

Other major announcements included the government’s intention to increase the Scottish Child Payment to £26.70 from April of next year.

Background

The Scottish Income Tax bands and rates proposed in the 2024-25 Budget are:

 2024-25
BandRate
Starter£12,571 – £14,87619%
Basic£14,877 – £26,56120%
Intermediate£26,562 – £43,66221%
Higher£43,663 – £75,00042%
Advanced£75,001 – £125,140*45%
TopAbove £125,14048%

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