The Scottish First Minister, Nicola Sturgeon, has set out proposals for Scottish income tax in 2017/18 which will see some taxpayers in Scotland paying higher taxes than the rest of the UK for the first time.
In a move which is expected to raise an additional £1 billion in revenues by 2021/22, the higher rate threshold in Scotland will only increase in line with CPI inflation and will not follow the rest of the UK.
In 2017/18 the threshold in Scotland will be £43,387 in contrast to the £45,000 promised by George Osborne in his 2016 Budget for the rest of the UK.
The Scottish Government currently has no powers to set personal allowances so these will increase in line with the UK. However, steps will be taken to make sure that from 2021/22 the personal allowance in Scotland is at least £12,750. The UK allowance at that time is currently set to be £12,500 so a 0% band will be introduced if necessary to ensure a higher effective personal allowance .
The First Minister has also announced that there will be no increases in tax rates during the course of this parliament.
See Scottish Income Tax.
