Scotland

Scottish income tax - how it affects you

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Scotland will see new income tax rates and bands come into effect in April 2018. So, will you be paying more or paying less? With the help of tax consultants Deloitte, we put together examples spanning different salaries.

The lower earner

£15,000 salary

If you earned a salary of £15,000 in 2018/19 and had no other income, the personal allowance of £11,850 would be deducted and £3,150 would be taxable.

If you were resident in Scotland, your income tax calculation would be as follows;

Scottish starter rate - £2,000 at 19%= £380

Scottish basic rate - £1,150 at 20% = £230

Total tax = £610

If you earned the same sum of money but were not resident in Scotland the full £3,150 would be taxable at 20% (UK basic rate) producing an income tax bill of £630. Therefore, you would pay £20 less as a resident of Scotland.

The medium to higher earners

£33,000 salary

A salary of £33,000 earned by you would have a tax liability of £21,150. If you were resident in Scotland from April 2018 your income tax would be as follows:

Scottish starter rate - £2,000 at 19% = £380

Scottish basic rate - £10,150 at 20% = £2,030

Scottish intermediate rate - £9,000 at 21% = £1,890

Tax total = £4,300

If you were resident elsewhere in the UK, the full £21,150 would be taxable at 20%, giving an income tax liability of £4,230. A Scottish resident would pay an additional £70 in income tax compared with living elsewhere in the UK.

£45,000 salary

If you were earning £45,000 during the 2018/19 tax year and had no other income you would receive a personal allowance of £11,850 - after which £33,150 would be taxable.

The tax calculation would be as follows;

Scottish starter rate - £2,000 at 19%= £380

Scottish basic rate - £10,150 at 20%= £2,030

Scottish intermediate rate - 19,430 at 21% =£4,080.30

Scottish higher rate - £1,570 at 41%= £643.70

Total tax = £7,134

If you are not resident in Scotland, the full £33,150 would be taxable at 20% (UK basic rate) producing an income tax bill of £6,630. You would therefore be paying £504 more in tax as a resident of Scotland.

The higher earner

£200,000 salary

If you earn a salary of £200,000 in 2018/19 and have no other income you are not entitled to a personal allowance because your income exceeds £123,700. The taxable income is therefore £200,000.

If you are a resident in Scotland, your income tax breaks down is as follows:

Scottish starter rate - £2,000 at 19%= £380

Scottish basic rate - £10,150 at 20%= £2,030

Scottish intermediate rate - £19,430at 21% = £4,080.30

Scottish higher rate - £118,420 at 41% = £48,552,20

Scottish additional rate - £50,000 at 46% = £23,000

Total tax = £78,042.50

If you are a resident elsewhere in the UK, on this salary you would pay £75,600 in tax - £2,442.50 less than north of the border.

The Budget Calculator, devised by Deloitte LLP, is indicative and should not be used to calculate actual liabilities, determine any financial strategy or as a substitute for professional advice.

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