Scotland Implements Progressive Income Tax Reforms for 2024-25

In this year, the Scottish Government is decided to introduce a series of strategic income tax changes aimed at promoting a more sustainable and equitable tax system. The mentioned updates announced by Deputy First Minister Shona Robison, will significantly impact the financial landscape for Scottish taxpayers.

New Advanced Tax Band and Top Rate Increase

New advanced tax band effective from April 6th, 2024 and it will be implemented, applying a 45% rate on annual income between £75,000 and £125,140. It is important to note that the Top rate of tax will increase only 1%, it means that income over £125,140 will now be taxed at 48%.

Unchanged Rates for Lower Brackets

The Basic, Intermediate, Starter, and Higher tax rates for earnings under £75,000 wouldn’t changed. The Basic and Starter rate bands will increase in line with inflation, while the Higher rate threshold will be maintained at £43,662.

Estimated Revenue and Tax Code Verification

The independent Scottish Fiscal Commission estimates that overall income tax will raise £18.8 billion in the 2024-25 financial year. Scottish taxpayers are encouraged to check their first payslip in the new year to ensure their tax code begins with an ‘S’, indicating they are paying the correct amount of tax on their income.

Deputy First Minister’s Perspective

Deputy First Minister Shona Robison focus attention on the progressive nature of Scotland’s income tax system and say “In the United Kingdom, Scotland has the most progressive income tax system. The income tax system builds on that progressive approach, protecting low income families and asking high income families to contribute

Further, Robison said that only 5% of the Scottish taxpayers will pay a higher tax rate this year as compared to the previous year, and the large number of taxpayers are not paying more tax as elsewhere in the United Kingdom. Robison emphasizing on the benefits of the additional revenue that come from tax system, including investments in public services and social security payments not provided elsewhere in the United Kingdom.

The following income tax bands and rates for the year 2024-25 in Scotland are given below

Starter£12,571 – £14,87619%
Basic£14,877 – £26,56120%
Intermediate£26,562 – £43,66221%
Higher£43,663 – £75,00042%
Advanced£75,001 – £125,14045%
TopAbove £125,14048%

Intimated that policies related to National Insurance Contributions and the Personal Tax Allowance remain reserved to the United Kingdom Government.The Scottish government wants more power to decide taxes. It confirms that such tax system impact the people in Scotland due to the decision made by the Scottish Parliament.


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