Income Tax Rates and Bands

Recent income tax rates and bands are as follows:

  2015/16 2016/17 2017/18
Savings rate: 10%, 0% from 2015/16 0 – 5,000 0- 5,000 0- 5,000
Dividend Allowance: 20% NA 0 – 5,000 0 – 5,000
Basic rate: 20% 0 – 31,785 0 – 32,000 0 – 33,500
Higher rate: 40% 31,786 – 150,000 32,001 – 150,000 33,501 – 150,000
Additional rate: 45% Over 150,000 Over 150,000 Over 150,000

Autumn 2017 Budget announced the following income tax rates and bands for 2018/19:

  2018/19
Savings rate : 0% 0 – 5,000
Dividend Allowance: 20% 2,000
Basic rate: 20% 0 – 34,500
Higher rate: 40% 34,501 – 150,000
Additional rate: 45% Over 150,000

When the personal allowance is taken into account an individual will start to pay tax at 40% when their total income exceeds 45,000 in 2017/18. This is expected to rise to 46,350 for 2018/19. This threshold (and the 45% threshold) can be increased if the taxpayer pays personal pension contributions or makes gift aid donations.

For 2017/18 the basic rate band on non-savings income for Scottish Taxpayers is set at 43,000. For all other income types, it remains in line with the main UK band of 45,000.

Scottish Income Tax Rates and Bands for non-savings income

  2018/19
Starter rate: 19% Up to 2,000
Basic rate: 20% 2,001 to 12,150
Intermediate rate: 21% 12,151 to 32,423
Higher rate: 41% 32,424 – 150,000
Additional rate: 46% Over 150,000