Scottish 24/25 Budget- Tax Rates Soar for Higher Scottish Earners

Finance secretary Shona Robinson delivered Scotland’s 2024/25 budget confirming tax rises for those with income in excess of £75,000.  Scottish tax rates apply to employment, pension and property income but do not apply to investment income such as interest and…

Carol Edwards, author of blog about scottish 24/25 budget

Blog20th Dec 2023

By Carol Edwards

Finance secretary Shona Robinson delivered Scotland’s 2024/25 budget confirming tax rises for those with income in excess of £75,000.  Scottish tax rates apply to employment, pension and property income but do not apply to investment income such as interest and dividends.

The changes are designed to help plug a 1.5bn funding shortfall alongside a series of spending cuts and are estimated to raise an additional £80m in tax.

Scotland already had the highest tax rate in the UK at 47% for those with income in excess of £125,140, but today she revealed that rate of Income Tax in Scotland will be increased by 1% to 48% from 6 April 2024. This compares to UK wide rate of 45% at this level, a difference of 3% more for those living in Scotland.

Additionally, a new 45% tax band, known as the ‘advanced rate’ will be introduced from 6 April 2024 for people earning between £75,000 and £125,140, meaning they will pay 3% more tax than they currently do (effectively 5% more than rest of UK).  This means someone already in Scotland earning £100,000 will see their Income Tax liability rise by £750, but they will also be paying over £3,300 more in tax, compared to someone living in the rest of the UK.

For 2024-25 the Starter and Basic rate bands will be increased by inflation to £14,876 and £26,561 respectively however the current thresholds for the higher and top bands will be frozen at £43,663 and £125,140 respectively and will not rise with inflation.

These measures will see Scotland have six progressive income tax bands in comparison to three across the rest of the UK.

The Scottish tax rates applicable from 6 April 2024:

  Scottish Tax Bands Scottish Tax Rate UK Tax Bands UK Tax Rate
Personal Allowance £12,570 0% £12,570 0%
Starter Rate £12,571 – £14,876 19%
Basic Rate £14,877 – £26,561 20% £12,571 – £50,270 20%
Intermediate Rate £26,562 – £43,662 21%
Higher Rate £43,663 – £75,000 42% 50,271 – 125,140 40%
Advanced Rate £75,001 – 125,140 45%
Top Rate Over £124,140 48% Over £125,140 45%

 

The changes announced have significantly increased the gap between Income Taxes paid by Scottish taxpayers compared with those in the rest of the UK.

If you would like any more information on how the changes to Scottish tax rates for the 2024/25 tax year will impact you please contact Carol Edwards, or a member of our Private Client Team.

By Carol Edwards

Related services

Sign up to updates

  1. Blog11th Dec 2023

    Carol Edwards, author of blog about scottish 24/25 budget

    Self-Assessment Tax Return Deadline is Coming-Tick Tock On The Compliance Clock

    The festive season is on the horizon, and it might be fair to say completing your tax return may not be at top of the priority list, but it’s important to remember the online self-assessment filing deadline of 31 January…

    By Carol Edwards

    View more
  2. Blog28th Sep 2022

    60 Day Capital Gains Tax Reporting – The Rules Recap

    Almost a year on from the extension of the timeframe for reporting disposals of residential property our blog provides a recap of the rules on what exactly needs reporting, who needs to report it, how is it reported, when is…

    By Carol Edwards

    View more
  3. Blog25th Jul 2022

    Self-Assessment Taxpayers: is your 31 July ‘Payments on Account’ due for payment?

    Self-Assessment taxpayers who had a liability of more than £1,000 in the 2020/21 tax year are likely to be required to make ‘Payments on Account’ towards their 2021/22 tax liability. The first interim payment was due on or before 31…

    By Carol Edwards

    View more

Share this page