Under the new system, most taxpayers in Scotland will fall into one of 5 income tax bands, following the introduction of 2 new bands either side of the basic rate.
The new bands due to be added are a starter rate of 19p for those earning between £11,851 and £13,850, and an intermediate rate of 21p for earnings between £24,001 and £44,430.
Members of the Scottish parliament voted in favour of the proposals, which were drafted in December’s Scottish Budget 2017, by 67 votes to 50.
Finance secretary Derek Mackay said 70% of taxpayers in Scotland will pay less income tax as a result of the reforms.
Our progressive approach to reforming income tax will deliver greater tax fairness and protect the lowest earning taxpayers in Scotland.
|Scottish Bands||Taxable Income 2018/19||Rate||Taxable Income 2017/18||Rate|
|Personal Allowance||Up to £11,850||0%||Up to £11,500||0%|
|Starter Rate||£11,851* to £13,850||19%||N/A||N/A|
|Basic Rate||£13,851 to £24,000||20%||£11,501 to £43,000||20%|
|Intermediate Rate||£24,001 to £44,430||21%||N/A||N/A|
|Higher Rate||£44,431 to £150,000**||41%||£43,001 to £150,000||40%|
*Assumes individuals are in receipt of the personal allowance.
**Those earning more than £100,000 will see their personal allowance reduce by £1 for every £2 earned over £100,000.