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Scottish Income Tax rates and bands for 2020-2021

The Scotland Act 2016 provides the Scottish Parliament with the power to set all income tax rates and bands that will apply to Scottish taxpayers’ Non-Savings, Non-Dividend (NSND) income for the tax year 2020 to 2021. This excludes setting the Personal Allowance, which remains reserved and is set by the UK Government in the UK Budget.

While the Scottish Parliament has the power to set the Scottish Income Tax rates and bands, HMRC will continue to be responsible for its collection and management. Therefore, Scottish Income Tax remains part of the existing UK income tax system and is not a fully devolved tax.

How Scottish Income Tax works

The income tax rates and bands payable by Scottish taxpayers will be those set by the Scottish Parliament. Receipts from Scottish Income Tax will be collected by HMRC and paid to the Scottish Government (via HM Treasury).

Scottish rates and bands for 2020 to 2021

On 4 March 2020 the Scottish Parliament set the following income tax rates and bands for 2020 to 2021.

  • Over £12,500* to £14,585 – Starter Rate – 19%
  • Over £14,585 to £25,158 – Scottish Basic Rate – 20%
  • Over £25,158 to £43,430 – Intermediate Rate – 21%
  • Over £43,430 to £150,000** – Higher Rate – 41%
  • Over £150.000*** – Top Rate – 46%

* assumes individuals are in receipt of the Standard UK Personal Allowance.

** those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000

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