The Scottish government has approved an overhaul of the Scottish income tax system, which will introduce new rates and bands from 6 April 2018.
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.
Mackay said:
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% |
| Top Rate | £150,001+ | 46% | £150,001+ | 45% |
*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.
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